Onto Innovation (ONTO) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $242.3 million, up 27% year-over-year, surpassing guidance due to strong AI packaging and advanced node demand, with specialty and advanced packaging revenue at a record $164 million.

• Closed over $300 million in volume purchase agreements for AI packaging and gate-all-around investments through 2025.

• Net income for Q2 2024 was $52.9 million, more than doubling year-over-year; diluted EPS was $1.07 GAAP and $1.32 non-GAAP, both above guidance.

• Cash, cash equivalents, and marketable securities totaled $786 million at quarter end.

• Export controls and local competition in China continued to impact sales, despite some export licenses being granted.

Financial highlights

• Q2 2024 revenue: $242.3M (+27% YoY, +6% sequentially); GAAP gross margin: 53%; non-GAAP gross margin: 53%.

• Q2 2024 GAAP operating income: $48.8M; non-GAAP operating income: $64.5M.

• Q2 2024 net income: $52.9M; non-GAAP net income: $65.4M.

• Q2 2024 diluted EPS: $1.07 GAAP; $1.32 non-GAAP.

• Record operating cash flow: $65M, 27% of revenue.

Outlook and guidance

• Q3 2024 revenue expected between $245M and $255M.

• Q3 gross margin guidance: 53%-55%; operating expenses expected at $64-$66M.

• Q3 diluted share count projected at 49.7M; non-GAAP EPS guidance: $1.25–$1.35.

• Second half 2024 revenue expected to be 5%-10% higher than first half.

• Continued strength in advanced packaging and gate-all-around adoption expected to drive 2025 growth.