Onto Innovation Q2 Earnings Call Highlights

Onto Innovation NYSE: ONTO reported second-quarter 2026 results above the high end of its guidance range, with revenue, margins and earnings supported by demand for semiconductor process-control systems used in advanced packaging and leading-edge chip manufacturing.

Chief Executive Officer Michael Plisinski said the company set quarterly revenue records and entered the second half with backlog exceeding $1.1 billion. He said increasing customer visibility prompted Onto Innovation to raise its outlook for second-half revenue growth to at least 25% from the first half, compared with a prior expectation for 15% growth.

“We set new quarterly revenue records with advanced nodes growing 50% quarter-over-quarter, and our inspection business, dominated by Dragonfly systems, growing by 30%,” Plisinski said. Second-Quarter Financial Results Chief Financial Officer Brian Roberts said second-quarter revenue totaled $343 million, up 18% sequentially and 35% from a year earlier. The company reported non-GAAP earnings per share of $1.93, which Roberts said was $0.20 above the high end of its prior guidance range.

Onto Innovation recorded a 57% gross margin, up 130 basis points from the first quarter and 250 basis points from the fourth quarter of 2025. Operating margin reached 30%, an increase of nearly 500 basis points from the beginning of the year, according to Roberts.

The company generated $62 million in operating cash flow during the quarter, slightly exceeding quarterly net income. As of June 30, Onto Innovation held nearly $1.9 billion in cash and short-term investments.

In May, the company completed a $1.5 billion offering of 0% convertible debt due in 2031, generating roughly $1.2 billion in net cash. It used the remaining amount for approximately $200 million of common-stock repurchases, a capped-call transaction and professional fees, Roberts said. Advanced Nodes and Packaging Demand Revenue from advanced-node customers rose about 50% from the first quarter to approximately $120 million. Memory represented roughly 60% of that business and grew about 60% sequentially, while logic revenue increased more than 40%.

Plisinski said demand broadened across memory, logic and NAND customers. He cited expanded adoption of the Atlas G6 platform for transistor metrology at nodes below 2 nanometers, as well as expected second-half shipments to a major DRAM customer for next-generation memory devices.

The company expects advanced-nodes revenue to grow more than 35% for full-year 2026. Plisinski also said the Iris films and integrated metrology product lines are on track for record revenue this year.

Advanced packaging and specialty devices accounted for nearly half of second-quarter revenue. Inspection revenue, led by the Dragonfly family, grew 30% sequentially as customers increased spending on 2.5D logic and high-bandwidth memory, or HBM, applications.

Onto Innovation raised its full-year advanced-packaging growth outlook to approximately 80%, from a previous projection of 50%. Plisinski said the Dragonfly G5 launch has driven demand from HBM manufacturers and outsourced semiconductor assembly and test, or OSAT, providers serving heterogeneous packaging applications.

The company received more than $200 million in Dragonfly orders from one OSAT partner during the quarter. Most of those orders are scheduled for delivery in 2027. Backlog Extends Into 2027 Plisinski said approximately 60% to 70% of the more than $1.1 billion backlog is tied to 2026, while 30% to 40% covers 2027. He characterized the backlog as evidence of customers’ confidence in their expansion plans and their desire to secure equipment supply earlier than historical norms.

Management said the backlog includes demand for advanced packaging across HBM and 2.5D logic, including purchases by OSATs and a widening customer base, as well as continued demand for advanced-node metrology products.