Fourth quarter revenue of $219 million exceeded
high end of guidance range
Onto Innovation Inc. (NYSE: ONTO) (“Onto Innovation,” “Onto,” or
the “Company”) today announced financial results for the fourth
quarter and full year 2023.
2023 Fourth Quarter Financial Highlights
- Quarterly revenue of $219 million, exceeding high end of
guidance to support stronger than anticipated orders for the
Dragonfly® inspection system.
- Quarterly GAAP operating income of $28 million and GAAP net
income of $30 million.
- Quarterly non-GAAP operating income of $56 million and non-GAAP
net income of $52 million.
- GAAP diluted earnings per share of $0.61 and non-GAAP diluted
earnings per share of $1.06.
- Record quarterly cash from operations of $62 million, or 28% of
revenue.
2023 Full Year Financial Highlights
- Revenue from specialty and advanced packaging markets grew 14%
over 2022.
- Cash generated from operations of $172 million improved by 26%
over 2022.
- Full year GAAP diluted earnings per share of $2.46.
- Full year non-GAAP diluted earnings per share of $3.73.
Fourth Quarter and Full Year Business Highlights
- Set a new record of $503 million full year revenue from
specialty and advanced packaging markets.
- JetStep® X500 system order received from the first glass
substrate customer, while other customers are in production with
advanced integrated circuit substrate (AICS) material and
qualifying next generation products with reduced dimensions for
both fan-out and heterogeneous packages.
- Introduced new Firefly® G3 inspection system aimed at
manufacturers supplying panel substrates to top five customers for
high performance compute products that require decreasing line
widths and spaces critical for yield improvement.
Michael Plisinski, chief executive officer of Onto Innovation,
commented, “Onto Innovation finished the year strongly, as we
supported a surge in demand for Dragonfly systems as well as
delivered several metrology systems for potential new applications
in the AI packaging space. This underscores our strategy to support
the entire value chain with a synergistic portfolio of process
control solutions.”
Plisinski continued, “In addition to packaging, revenue for our
portfolio of solutions for power semiconductor customers expanded
by 40% as compared to the prior year. Though our advanced nodes
business saw decline matching reduced spending from our customers,
we expanded our value to customers by qualifying and delivering
several films and integrated metrology systems for our advanced
nodes customers. As spending returns and we continue to focus on
being a stronger supplier to our customers, we are optimistic that
we will see additional growth. As we look ahead to 2024, we will
continue to focus our resources and strengths on customer products
and applications that are rapidly growing to help them develop and
ramp some of the most complex manufacturing processes in the
world.”
Onto Innovation Inc.
Key Quarterly Financial
Data
(In thousands, except per
share amounts)
US GAAP
December 30, 2023
September 30, 2023
December 31, 2022
Revenue
$
218,856
$
207,185
$
253,270
Gross profit margin
49
%
52
%
54
%
Operating income
$
28,230
$
34,006
$
61,212
Net income
$
30,309
$
35,886
$
66,214
Net income per diluted share
$
0.61
$
0.73
$
1.34
US NON-GAAP
December 30, 2023
September 30, 2023
December 31, 2022
Revenue
$
218,856
$
207,185
$
253,270
Gross profit margin
52
%
52
%
54
%
Operating income
$
56,391
$
49,592
$
76,082
Net income
$
52,443
$
47,613
$
77,544
Net income per diluted share
$
1.06
$
0.96
$
1.57
For the first quarter ending March 30, 2024, the Company is
providing the following guidance:
- Revenue is expected to be in the range of $215 to $230
million.
- GAAP diluted earnings per share is expected to be in the range
of $0.74 to $0.94.
- Non-GAAP diluted earnings per share is expected to be in the
range of $1.00 to $1.20.
Webcast & Conference Call Details
Onto Innovation will host a conference call at 4:30 p.m. Eastern
Time today, February 8, 2024, to discuss its fourth quarter and
full year 2023 financial results and other matters in greater
detail. To participate in the call, please dial (888) 256-1007 or
International: +1 (929) 477-0448 and reference conference ID
7036289 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 operating income, non-GAAP net income,
non-GAAP diluted earnings per share and non-GAAP operating margin,
which exclude amortization of acquisition-related intangible
assets, certain merger or acquisition-related expenses and
benefits, significant litigation charges or benefits and legal
costs, and restructuring charges. Non-GAAP operating income,
non-GAAP net income, non-GAAP diluted earnings per share and
non-GAAP operating margin can also exclude certain other gains and
losses that are 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 operation 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 acquisition-related intangible assets: 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
acquisition-related 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 charges: 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 unique transactions may
limit the comparability of our on-going operations with prior and
future periods.
Significant litigation charges or benefits and legal costs: 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 in order 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
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 our
products and services; Onto Innovation’s manufacturing practices
and ability to deliver both products and services consistent with
customers’ demands and expectations and strengthen its market
position; Onto Innovation’s expectations regarding the
semiconductor market outlook; Onto Innovation’s future quarterly
and annual 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, such as
the COVID-19 pandemic, 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 31, 2022,
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
(Financial tables follow)
ONTO INNOVATION INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands) -
(Unaudited)
December 30,
December 31,
2023
2022
ASSETS
Current assets
Cash, cash equivalents and marketable
securities
$
697,811
$
547,784
Accounts receivable, net
226,556
241,395
Inventories
327,773
324,282
Prepaid and other assets
31,127
21,411
Total current assets
1,283,267
1,134,872
Net property, plant and equipment
103,611
91,980
Goodwill and intangibles, net
483,186
538,008
Other assets
39,648
30,003
Total assets
$
1,909,712
$
1,794,863
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities
Accounts payable and accrued
liabilities
$
91,931
$
103,362
Other current liabilities
55,795
57,196
Total current liabilities
147,726
160,558
Other non-current liabilities
25,451
37,879
Total liabilities
173,177
198,437
Stockholders’ equity
1,736,535
1,596,426
Total liabilities and stockholders’
equity
$
1,909,712
$
1,794,863
ONTO INNOVATION INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per
share amounts) - (Unaudited)
Three Months Ended
Twelve Months Ended
December 30,
December 31,
December 30,
December 31,
2023
2022
2023
2022
Revenue
$
218,856
$
253,270
$
815,868
$
1,005,183
Cost of revenue
110,890
116,048
395,614
465,962
Gross profit
107,966
137,222
420,254
539,221
Operating expenses:
Research and development
24,021
27,825
104,442
111,953
Sales and marketing
15,349
16,374
61,765
65,688
General and administrative
27,017
17,988
83,147
69,582
Amortization
13,349
13,823
54,822
55,284
Total operating expenses
79,736
76,010
304,176
302,507
Operating income
28,230
61,212
116,078
236,714
Interest income, net
6,456
2,457
20,356
5,011
Other income (expense), net
(860
)
1,884
(3,852
)
(141
)
Income before income taxes
33,826
65,553
132,582
241,584
Provision (benefit) for income taxes
3,517
(661
)
11,423
18,250
Net income
$
30,309
$
66,214
$
121,159
$
223,334
Earnings per share:
Basic
$
0.62
$
1.35
$
2.47
$
4.52
Diluted
$
0.61
$
1.34
$
2.46
$
4.49
Weighted average shares outstanding:
Basic
49,151
49,092
48,971
49,424
Diluted
49,562
49,401
49,318
49,764
ONTO INNOVATION INC.
NON-GAAP FINANCIAL
SUMMARY
(In thousands, except
percentage and per share amounts) - (Unaudited)
Three Months Ended
Twelve Months Ended
December 30, 2023
December 31, 2022
December 30, 2023
December 31, 2022
Revenue
$
218,856
$
253,270
$
815,868
$
1,005,183
Gross profit
$
112,751
$
137,317
$
427,439
$
539,300
Gross margin as percentage of revenue
52
%
54
%
52
%
54
%
Operating expenses
$
56,360
$
61,235
$
231,996
$
237,606
Operating income
$
56,391
$
76,082
$
195,443
$
301,694
Operating margin as a percentage of
revenue
26
%
30
%
24
%
30
%
Net income
$
52,443
$
77,544
$
183,857
$
274,667
Net income per diluted share
$
1.06
$
1.57
$
3.73
$
5.52
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
Twelve Months Ended
December 30, 2023
December 31, 2022
December 30, 2023
December 31, 2022
U.S. GAAP gross profit
$
107,966
$
137,222
$
420,254
$
539,221
Pre-tax non-GAAP items:
Merger and acquisition related
expenses
37
95
158
79
Restructuring expenses
4,748
—
7,027
—
Non-GAAP gross profit
112,751
137,317
427,439
539,300
U.S. GAAP gross margin as a percentage of
revenue
49
%
54
%
52
%
54
%
Non-GAAP gross margin as a percentage of
revenue
52
%
54
%
52
%
54
%
U.S. GAAP operating expenses
$
79,736
$
76,010
$
304,176
$
302,507
Pre-tax non-GAAP items:
Merger and acquisition related
expenses
214
347
2,449
5,682
Restructuring expenses
346
—
3,572
—
Litigation expenses
9,467
605
11,337
3,935
Amortization of intangibles
13,349
13,823
54,822
55,284
Non-GAAP operating expenses
56,360
61,235
231,996
237,606
Non-GAAP operating income
$
56,391
$
76,082
$
195,443
$
301,694
GAAP operating margin as a percentage of
revenue
13
%
24
%
14
%
24
%
Non-GAAP operating margin as a percentage
of revenue
26
%
30
%
24
%
30
%
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
Twelve Months Ended
December 30, 2023
December 31, 2022
December 30, 2023
December 31, 2022
U.S. GAAP net income
$
30,309
$
66,214
$
121,159
$
223,334
Pre-tax non-GAAP items:
Merger and acquisition related
expenses
251
442
2,607
5,761
Restructuring expenses
5,094
—
10,599
—
Litigation expenses
9,467
605
11,337
3,935
Amortization of intangibles
13,349
13,823
54,822
55,284
Net tax provision adjustments
(6,027
)
(3,540
)
(16,667
)
(13,647
)
Non-GAAP net income
$
52,443
$
77,544
$
183,857
$
274,667
Non-GAAP net income per diluted share
$
1.06
$
1.57
$
3.73
$
5.52
ONTO INNOVATION INC
SUPPLEMENTAL INFORMATION -
RECONCILIATION OF FIRST QUARTER 2024
GAAP TO NON-GAAP
GUIDANCE
Low
High
Estimated GAAP net income per diluted
share
$
0.74
$
0.94
Estimated non-GAAP items:
Amortization of intangibles
0.28
0.28
Merger and acquisition related
expenses
0.01
0.01
Litigation expenses
0.01
0.01
Restructuring expenses
0.02
0.02
Net tax provision adjustments
(0.06
)
(0.06
)
Estimated non-GAAP net income per diluted
share
$
1.00
$
1.20
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240208961435/en/
Michael Sheaffer +1.978.253.6273
Mike.Sheaffer@OntoInnovation.com
Onto Innovation (NYSE:ONTO)
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