Onto Innovation (ONTO) Q2 2026 earnings summary

Executive summary

• Achieved record Q2 2026 revenue of $343.1 million, up 35.3% year-over-year and nearly 18% sequentially, surpassing guidance for revenue, gross margin, operating margin, and EPS.

• Advanced nodes revenue grew 50% sequentially; inspection business (Dragonfly systems) up 30%; specialty devices and advanced packaging revenue reached all-time highs, driven by AI, HBM, logic, memory, and silicon photonics demand.

• Backlog exceeded $1.1 billion, with strong customer investment visibility and expectations for 25%+ revenue growth in the second half of 2026 and continued momentum into 2027.

• Net income for Q2 2026 was $60.1 million (GAAP EPS $1.21; non-GAAP EPS $1.93), nearly doubling year-over-year.

• Cash and short-term investments totaled $1.88 billion at quarter end, up from $639.6 million at the start of the year, primarily due to the 2031 Notes issuance.

Financial highlights

• Q2 2026 revenue: $343.1M (+35.3% YoY, +18% sequentially); gross margin: 53.4% (non-GAAP: 57.0%).

• Q2 2026 operating margin: 18.5% (non-GAAP: 30.0%), up nearly 500 bps since the start of the year.

• Q2 2026 net income: $60.1M (EPS $1.21; non-GAAP EPS $1.93); cash from operations: $62M.

• Six months ended June 30, 2026: revenue $635.1M (+22.1% YoY), gross margin 51.9% (non-GAAP: 56.4%), net income $93.9M (EPS $1.88; non-GAAP EPS $3.35).

• Operating cash flow for six months: $87.8M, down from $149.9M YoY due to timing of receivables and higher inventory.

Outlook and guidance

• Second half 2026 revenue expected to grow 25%+ over first half; Q3 revenue guided at $380–$400 million, with Q4 higher.

• Q3 2026 gross margin guidance: 57.3% to 57.8%; operating margin to reach 33%+ by year-end (non-GAAP Q3: 31.5%–32.5%).

• Q3 2026 GAAP EPS: $1.54 to $1.70; non-GAAP EPS: $2.18 to $2.38.

• Advanced nodes revenue projected to grow 35%+ in 2026; advanced packaging growth outlook raised to 80% for the year, with further growth expected in 2027.

• Management expects continued investment in advanced technologies and new materials by customers, supporting long-term demand.