Onto Innovation (ONTO) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $242.3 million, up 27.1% year-over-year, surpassing guidance due to strong AI packaging demand and advanced node investments.

• Achieved record revenue in Specialty Devices and Advanced Packaging at $164 million, with AI packaging accounting for over half of revenue in these markets.

• 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.

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

Financial highlights

• Q2 2024 revenue: $242.3M, up 6% sequentially and 27% year-over-year.

• Gross margin improved to 53% (GAAP and non-GAAP), up from 52.7% a year ago.

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

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

• Ended Q2 with $786M in cash and short-term investments.

Outlook and guidance

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

• Gross margin guidance for Q3 is 53%-55%; operating expenses expected at $64-$66M.

• Non-GAAP diluted EPS guidance for Q3: $1.25–$1.35; GAAP diluted EPS: $0.98–$1.08.

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

• Management expects continued investment in advanced technologies and new materials to drive long-term demand.