ONTO Onto Innovation Inc

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 08, 2024

 

 

Onto Innovation Inc.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware			001-39110	94-2276314
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
16 Jonspin Road
Wilmington, Massachusetts				01887
(Address of Principal Executive Offices)				(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (978) 253-6200

 

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.001 par value per share		ONTO		New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

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Item 2.02 Results of Operations and Financial Condition.

On August 8, 2024, Onto Innovation Inc. announced in a news release its results for its fiscal second quarter ended June 29, 2024 and other related material information (the “Earnings Release”). A copy of the Earnings Release is attached hereto as Exhibit 99.1 and incorporated by reference herein.

The information in this Current Report on Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description of Exhibit
99.1	News release for Onto Innovation Inc. dated August 8, 2024, announcing financial results for its second quarter ended June 29, 2024
104	Cover Page Interaction Data File (embedded within the Inline XBRL document)

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			Onto Innovation Inc.
Date:	August 8, 2024	By:	/s/ Yoon Ah Oh
			Vice President, General Counsel & Corporate Secretary

 

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Onto Innovation Reports

2024 Second Quarter Results

 

Strong demand for AI packaging and orders for emerging gate-all-around nodes drive revenue above high end of guidance

 

Wilmington, Mass., August 8, 2024 – Onto Innovation Inc. (NYSE: ONTO) (“Onto Innovation,” “Onto,” or the “Company”) today announced financial results for the second fiscal quarter of 2024.

 

Second Quarter Financial Highlights

 

Second Quarter Business Highlights

 

 

Michael Plisinski, chief executive officer of Onto Innovation, commented, “The Onto Innovation team is working closely with technology leaders in advanced packaging and advanced nodes to drive yield improvements and enable smoother ramp times. As a result, we are seeing greater adoption of our metrology in packaging and new applications for the Dragonfly® platform leading to stronger sales. As we look forward, we expect continued strength in advanced packaging and the adoption of gate-all-around transistor architecture at several customers to lead our revenue growth in 2025.”

 

 

 

 

 

 

 

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Onto Innovation Inc.
Key Quarterly Financial Data

(In thousands, except per share amounts)

 

US GAAP
		June 29, 2024				March 30, 2024				July 1, 2023
Revenue		$	242,327			$	228,846			$	190,662
Gross profit margin			53	%			52	%			53	%
Operating income		$	48,833			$	42,738			$	24,807
Net income		$	52,949			$	46,853			$	25,896
Net income per diluted share		$	1.07			$	0.94			$	0.53

 

 

NON-GAAP
		June 29, 2024				March 30, 2024				July 1, 2023
Revenue		$	242,327			$	228,846			$	190,662
Gross profit margin			53	%			52	%			53	%
Operating income		$	64,530			$	57,300			$	40,565
Net income		$	65,354			$	58,452			$	38,754
Net income per diluted share		$	1.32			$	1.18			$	0.79

 

 

 

Outlook

For the third fiscal quarter ending September 28, 2024, the Company is providing the following guidance:

 

Webcast & Conference Call Details

Onto Innovation will host a conference call at 4:30 p.m. Eastern Time today, August 8, 2024, to discuss its second quarter 2024 financial results and other matters in greater detail. To participate in the call, please dial (888) 394-8218 or International: +1 (646) 828-8193 and reference conference ID 7606226 at least five (5) minutes prior to the scheduled start time. A live webcast will also be available at www.ontoinnovation.com.

 

To listen to the live webcast, please go to the website at least fifteen (15) minutes early to register, download and install any necessary audio software. There will be a replay of the conference call available for one year on the Company’s website at www.ontoinnovation.com.

Discussion of Non-GAAP Financial Measures

The Company has provided in this release non-GAAP financial measures, including non-GAAP gross margin as a percentage of revenue, non-GAAP operating income, non-GAAP net income, non-GAAP diluted earnings per share and non-GAAP operating margin as a percentage of revenue, which exclude amortization of intangibles, merger and acquisition-related expenses and benefits, litigation expenses [and benefits] and restructuring costs. Non-GAAP gross margin as a percentage of revenue, non-GAAP operating income, non-GAAP net income, non-GAAP diluted earnings per share and non-GAAP

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operating margin as a percentage of revenue can also exclude certain other gains and losses that are either isolated or cannot be expected to occur again with any predictability or otherwise are not representative of our ongoing operations, tax provisions/benefits related to the previous items, and significant discrete tax events. We exclude the above items because they are outside of our normal operations and/or, in certain cases, are difficult to forecast accurately for future periods.

We utilize several different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of our business, in making operating decisions, forecasting and planning for future periods, and determining payments under compensation programs. We consider the use of the non-GAAP measures to be helpful in assessing the performance of the ongoing operations of our business. We believe that disclosing non-GAAP financial measures provides useful supplemental data that, while not a substitute for financial measures prepared in accordance with GAAP, allows for greater transparency in the review of our financial and operational performance. We also believe that disclosing non-GAAP financial measures provides useful information to investors and others in understanding and evaluating our operating results and future prospects in the same manner as management and in comparing financial results across accounting periods and to those of peer companies. More specifically, management adjusts for the excluded items for the following reasons:

Amortization of intangibles: we do not acquire businesses and assets on a predictable cycle. The amount of purchase price allocated to the purchased intangible assets and the term of amortization can vary significantly and are unique to each acquisition or purchase. We believe that excluding amortization of purchased intangible assets allows the users of our financial statements to better review and understand the historic and current results of our operations, and also facilitates comparisons to peer companies.

Merger or acquisition related expenses and benefits: we incur expenses or benefits with respect to certain items associated with our mergers and acquisitions, such as transaction and integration costs, change in control payments, adjustments to the fair value of assets, etc. We exclude such expenses or benefits as they are related to acquisitions and have no direct correlation to the operation of our on-going business.

Restructuring expenses: we incur restructuring and impairment charges on individual or groups of employed assets, which arise from unforeseen circumstances and/or often occur outside of the ordinary course of our on-going business. Although these events are reflected in our GAAP financials, these transactions may limit the comparability of our on-going operations with prior and future periods.

Litigation expenses and benefits: we may incur charges or benefits as well as legal costs in connection with litigation and other contingencies unrelated to our core operations. We exclude these charges or benefits, when significant, as well as legal costs associated with significant legal matters, because we do not believe they are reflective of on-going business and operating results.

Income tax expense: we estimate the tax effect of the items identified to determine a non-GAAP annual effective tax rate applied to the pretax amount to calculate the non-GAAP provision for income taxes. We also adjust for items for which the nature and/or tax jurisdiction requires the application of a specific tax rate or treatment.

From time to time in the future, there may be other items excluded if we believe that doing so is consistent with the goal of providing useful information to investors and management.

There are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. The non-GAAP financial measures are limited in value because they exclude certain items that may have a material impact on our reported financial results. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP in the United States. Investors should review the reconciliation of the non-GAAP financial measures to their most directly comparable GAAP financial measures as provided in the tables accompanying this press release.

Forward Looking Statements

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This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”) which include, but are not limited to, statements regarding Onto Innovation’s business momentum and future growth; technology development, product introduction and acceptance of Onto Innovation’s products and services; Onto Innovation’s manufacturing practices and ability to deliver both products and services consistent with its customers’ demands and expectations and strengthen its market position; Onto Innovation’s expectations regarding the semiconductor market outlook; Onto Innovation’s future quarterly financial outlook; as well as other matters that are not purely historical data. Onto Innovation wishes to take advantage of the “safe harbor” provided for by the Act and cautions that actual results may differ materially from those projected as a result of various factors, including risks and uncertainties, many of which are beyond Onto Innovation’s control. Such factors include, but are not limited to, the Company’s ability to leverage its resources to improve its position in its core markets; its ability to weather difficult economic environments; its ability to open new market opportunities and target high-margin markets; the strength/weakness of the back-end and/or front-end semiconductor market segments; fluctuations in customer capital spending; the Company’s ability to effectively manage its supply chain and adequately source components from suppliers to meet customer demand; the effects of political, economic, legal, and regulatory changes or conflicts on the Company's global operations; its ability to adequately protect its intellectual property rights and maintain data security; the effects of natural disasters or public health emergencies on the global economy and on the Company’s customers, suppliers, employees, and business; its ability to effectively maneuver global trade issues and changes in trade and export regulations and license policies; the Company’s ability to maintain relationships with its customers and manage appropriate levels of inventory to meet customer demands; and the Company’s ability to successfully integrate acquired businesses and technologies. Additional information and considerations regarding the risks faced by Onto Innovation are available in Onto Innovation’s Form 10-K report for the year ended December 30, 2023, and other filings with the Securities and Exchange Commission. As the forward-looking statements are based on Onto Innovation’s current expectations, the Company cannot guarantee any related future results, levels of activity, performance, or achievements. Onto Innovation does not assume any obligation to update the forward-looking information contained in this press release, except as required by law.

 

About Onto Innovation

Onto Innovation is a leader in process control, combining global scale with an expanded portfolio of leading-edge technologies that include: Un-patterned wafer quality; 3D metrology spanning chip features from nanometer scale transistors to large die interconnects; macro defect inspection of wafers and packages; elemental layer composition; overlay metrology; factory analytics; and lithography for advanced semiconductor packaging. Our breadth of offerings across the entire semiconductor value chain combined with our connected thinking approach results in a unique perspective to help solve our customers’ most difficult yield, device performance, quality, and reliability issues. Onto Innovation strives to optimize customers’ critical path of progress by making them smarter, faster and more efficient. With headquarters and manufacturing in the U.S., Onto Innovation supports customers with a worldwide sales and service organization. Additional information can be found at www.ontoinnovation.com.

Source: Onto Innovation Inc.

ONTO-I

For more information, please contact:

Sidney Ho

+1 408.376.9163

sidney.ho@OntoInnovation.com

(Financial tables follow)

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ONTO INNOVATION INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands) - (Unaudited)

 

		June 29, 2024				December 30, 2023
ASSETS
Current assets
Cash, cash equivalents and marketable securities		$	786,032			$	697,811
Accounts receivable, net			237,830				226,556
Inventories			319,712				327,773
Prepaid and other assets			41,638				31,127
Total current assets			1,385,212				1,283,267
Net property, plant and equipment			115,467				103,611
Goodwill and intangibles, net			457,011				483,186
Other assets			47,726				39,648
Total assets		$	2,005,416			$	1,909,712
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued liabilities		$	91,823			$	91,931
Other current liabilities			56,597				55,795
Total current liabilities			148,420				147,726
Other non-current liabilities			25,320				25,451
Total liabilities			173,740				173,177
Stockholders’ equity			1,831,676				1,736,535
Total liabilities and stockholders’ equity		$	2,005,416			$	1,909,712

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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ONTO INNOVATION INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts) - (Unaudited)

 

 

		Three Months Ended								Six Months Ended
		June 29, 2024				July 1, 2023				June 29, 2024				July 1, 2023
Revenue		$	242,327			$	190,662			$	471,172			$	389,827
Cost of revenue			114,091				90,201				224,651				184,391
Gross profit			128,236				100,461				246,521				205,436
Operating expenses:
Research and development			27,044				27,043				53,599				54,285
Sales and marketing			18,976				16,024				37,295				31,661
General and administrative			20,271				18,762				37,833				37,999
Amortization			13,112				13,825				26,224				27,649
Total operating expenses			79,403				75,654				154,951				151,594
Operating income			48,833				24,807				91,570				53,842
Interest income, net			8,496				4,758				15,857				8,206
Other (expense) income, net			(60	)			(1,710	)			734				(1,991	)
Income before income taxes			57,269				27,855				108,161				60,057
Provision for income taxes			4,320				1,959				8,359				5,093
Net income		$	52,949			$	25,896			$	99,802			$	54,964
Earnings per share:
Basic		$	1.07			$	0.53			$	2.02			$	1.12
Diluted		$	1.07			$	0.53			$	2.01			$	1.12
Weighted average shares     outstanding:
Basic			49,342				48,976				49,286				48,865
Diluted			49,674				49,274				49,656				49,175

 

 

 

 

 

 

 

 

 

 

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ONTO INNOVATION INC.

NON-GAAP FINANCIAL SUMMARY

(In thousands, except percentage and per share amounts) - (Unaudited)

 

	Three Months Ended						Six Months Ended
	June 29, 2024			July 1, 2023			June 29, 2024			July 1, 2023
Revenue	$	242,327		$	190,662		$	471,172		$	389,827
Gross profit	$	128,974		$	100,501		$	248,082		$	207,795
Gross margin as percentage of    revenue		53	%		53	%		53	%		53	%
Operating expenses	$	64,444		$	59,936		$	126,253		$	118,335
Operating income	$	64,530		$	40,565		$	121,829		$	89,460
Operating margin as a    percentage of revenue		27	%		21	%		26	%		23	%
Net income	$	65,354		$	38,754		$	123,806		$	83,801
Net income per diluted share	$	1.32		$	0.79		$	2.49		$	1.70

 

 

RECONCILIATION OF GAAP GROSS PROFIT,

OPERATING EXPENSES AND OPERATING INCOME TO NON-GAAP

GROSS PROFIT, OPERATING EXPENSES AND OPERATING INCOME

(In thousands, except percentages) - (Unaudited)

 

	Three Months Ended						Six Months Ended
	June 29, 2024			July 1, 2023			June 29, 2024			July 1, 2023
U.S. GAAP gross profit	$	128,236		$	100,461		$	246,521		$	205,436
Pre-tax non-GAAP items:
Merger and acquisition related expenses		35			40			70			80
Restructuring expenses		703			—			1,491			2,279
Non-GAAP gross profit	$	128,974		$	100,501		$	248,082		$	207,795
U.S. GAAP gross margin as a    percentage of‌‌ revenue		53	%		53	%		52	%		53	%
Non-GAAP gross margin as a    percentage of revenue		53	%		53	%		53	%		53	%
U.S. GAAP operating expenses	$	79,403		$	75,654		$	154,951		$	151,594
Pre-tax non-GAAP items:
Merger and acquisition related expenses		1,229			393			1,568			1,401
Restructuring expenses		621			1,192			879			3,226
Litigation expenses		(3	)		308			27			983
Amortization of intangibles		13,112			13,825			26,224			27,649
Non-GAAP operating expenses		64,444			59,936			126,253			118,335
Non-GAAP operating income	$	64,530		$	40,565		$	121,829		$	89,460
GAAP operating margin as a    percentage of revenue		20	%		13	%		19	%		14	%
Non-GAAP operating margin    as a percentage of revenue		27	%		21	%		26	%		23	%

 

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ONTO INNOVATION INC.

RECONCILIATION OF GAAP NET INCOME TO

NON-GAAP NET INCOME

(In thousands, except share and per share data) - (Unaudited)

 

	Three Months Ended						Six Months Ended
	June 29, 2024			July 1, 2023			June 29, 2024			July 1, 2023
U.S. GAAP net income	$	52,949		$	25,896		$	99,802		$	54,964
Pre-tax non-GAAP items:
Merger and acquisition related expenses		1,264			434			1,638			1,482
Restructuring expenses		1,324			1,192			2,370			5,505
Litigation expenses		(3	)		308			27			983
Amortization of intangibles		13,112			13,825			26,224			27,649
Net tax provision adjustments		(3,292	)		(2,901	)		(6,255	)		(6,782	)
Non-GAAP net income	$	65,354		$	38,754		$	123,806		$	83,801
Non-GAAP net income per    diluted share	$	1.32		$	0.79		$	2.49		$	1.70

 

 

 

ONTO INNOVATION INC

SUPPLEMENTAL INFORMATION - RECONCILIATION OF THIRD QUARTER 2024

GAAP TO NON-GAAP GUIDANCE

 

	Low				High
Estimated GAAP net income per diluted share	$	0.98			$	1.08
Estimated non-GAAP items:
Amortization of intangibles		0.27				0.27
Restructuring expenses		0.05				0.05
Net tax provision adjustments		(0.05	)			(0.05	)
Estimated non-GAAP net income per diluted share	$	1.25			$	1.35

 

 

 

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v3.24.2.u1

Document And Entity Information	Aug. 08, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 08, 2024
Entity Registrant Name	Onto Innovation Inc.
Entity Central Index Key	0000704532
Entity Emerging Growth Company	false
Entity File Number	001-39110
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	94-2276314
Entity Address, Address Line One	16 Jonspin Road
Entity Address, City or Town	Wilmington
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	01887
City Area Code	(978)
Local Phone Number	253-6200
Entity Information, Former Legal or Registered Name	Not applicable
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.001 par value per share
Trading Symbol	ONTO
Security Exchange Name	NYSE

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