Onto Innovation 2025 Q1 Earnings Strong Performance as Net Income Surges 36.8%
Friday, May 9, 2025 2:14 am ET
69min read ONTO Trend
Revenue
Onto Innovation reported a 16.5% increase in total revenue for Q1 2025, reaching $266.61 million, up from $228.85 million in Q1 2024. The Systems and Software segment contributed significantly, generating $231.15 million. Meanwhile, the Parts segment added $18.18 million, and Services brought in $17.28 million, culminating in the strong overall revenue figure.
Earnings/Net Income
Onto Innovation's earnings per share (EPS) increased by 36.8% to $1.30 in 2025 Q1, compared to $0.95 in 2024 Q1, reflecting sustained earnings growth. The company's profitability improved with a net income of $64.09 million, achieving a 36.8% rise from $46.85 million in the previous year. This quarter marked a record high for fiscal Q1 net income in over two decades. The EPS results indicate a strong performance.
Price Action
The stock price of Onto Innovation has edged down 1.33% during the latest trading day, has climbed 5.04% during the most recent full trading week, and has jumped 13.58% month-to-date.
Post-Earnings Price Action Review
Over the past five years, Onto Innovation's strategy of purchasing shares following a quarter-over-quarter revenue increase and holding for 30 days has delivered impressive returns, achieving an overall return of 553.41%. This performance has significantly surpassed the benchmark return of 92.56%. Despite experiencing a maximum drawdown of -50.13% and a Sharpe ratio of 0.91, the strategy has demonstrated a consistent compound annual growth rate (CAGR) of 45.78%, indicating robust long-term performance. The strategy's high volatility is reflected in a 50.08% annualized standard deviation, which likely contributed to its substantial returns, albeit with increased risk. This approach highlights Onto Innovation's ability to maintain strong performance amidst market fluctuations.
CEO Commentary
Michael Plisinski, Chief Executive Officer of Onto Innovation, expressed satisfaction with the company's record quarter, highlighting strong market alignment and operational enhancements that yielded a cash generation rate of 35% of revenue. He noted that the substantial demand in advanced nodes reflects the strength of their optical metrology portfolio, while the evolving packaging market necessitates more advanced inspection and metrology solutions. Plisinski reaffirmed that their product roadmaps are well-positioned to align with anticipated technology transitions later this year and early in 2026.
Guidance
For the second fiscal quarter ending June 28, 2025, the company expects revenue to range between $240 million and $260 million. GAAP diluted earnings per share are projected to be between $0.99 and $1.13, while non-GAAP diluted earnings per share are anticipated to be in the range of $1.21 to $1.35.
Additional News
In recent developments, Onto Innovation has been closely observed following a significant downgrade by Cantor Fitzgerald, which adjusted the stock rating from "Overweight" to "Neutral" and substantially lowered the price target from $250.00 to $135.00. Additionally, Stifel Financial Corp has increased its stake in Onto Innovation by acquiring 3,740 shares, indicating continued interest in the company despite market fluctuations. Furthermore, Onto Innovation is advancing its strategic initiatives by planning new manufacturing capabilities in Asia to enhance business continuity in response to tariff challenges, with shipments expected to begin in the latter half of 2025.
Ask Aime: Why is Onto Innovation bullish?
