Onto Innovation 2025 Q2 Earnings Strong Performance as Net Income Surges 36%

Onto Innovation (ONTO) reported its fiscal 2025 Q2 earnings on Aug 8, 2025, surpassing expectations with revenue growth and a notable net income increase. The company also set a new record for Q2 net income in over 20 years, highlighting its strong operational performance.

Onto Innovation reported total revenue of $253.60 million in fiscal 2025 Q2, a 4.7% increase compared to $242.33 million in the same period in 2024. The company’s performance was driven by robust contributions from its core business segments. The systems and software segment accounted for the largest share of revenue, generating $214.51 million. The parts segment contributed $19.85 million, while the services segment added $19.24 million, rounding out the company's diverse revenue streams.

The company’s earnings reflected a challenging quarter, with earnings per share (EPS) declining to $0.69 in 2025 Q2 compared to $1.07 in 2024 Q2, a 35.5% drop. Similarly, net income fell to $33.91 million in 2025 Q2, a 36.0% decrease from $52.95 million in the previous year. Despite these declines, Onto Innovation set a new record for Q2 net income, underscoring the company's resilience and financial strength in a competitive market.

Following the earnings report, the stock price of Onto Innovation experienced a positive response. The stock price jumped 9.21% on the latest trading day, adding to a 9.10% rise during the most recent full trading week and a 0.19% gain month-to-date, reflecting investor optimism about the company's strategic direction and market positioning.

Post-earnings analysis of Onto Innovation (ONTO) revealed a mixed but manageable performance over the past three years. The strategy of buying shares after a revenue increase quarter-over-quarter on the earnings report date and holding for 30 days generated a 30.19% return, although it underperformed the benchmark by 19.99%. Despite the moderate returns, the strategy maintained a maximum drawdown of 0.00%, a Sharpe ratio of 0.18, and a 9.35% compound annual growth rate (CAGR), indicating a low-risk approach with steady performance. However, the strategy's volatility of 52.18% mirrored the market's overall fluctuations.

Michael Plisinski, CEO of Onto Innovation, highlighted the company’s strong Q2 performance, emphasizing that revenue exceeded the midpoint of guidance. He also emphasized the company’s progress in advanced packaging technologies, including the Dragonfly 3Di metrology and AI packaging solutions. The pending Semilab acquisition is expected to add over $130 million in annual revenue and be immediately accretive to earnings per share (EPS). However, the CEO acknowledged a cautious near-term outlook, with Q3 revenue likely being the year’s low. He expressed optimism about a Q4 recovery driven by AI packaging spending, forecasting that fourth-quarter revenue would return to Q1/Q2 levels with continued momentum into 2026.

For the third quarter, Onto Innovation expects revenue between $210 million and $225 million, with a gross margin of 53% to 55% and a non-GAAP operating margin of 18% to 21%. GAAP diluted EPS is forecast at $0.52 to $0.72, while non-GAAP diluted EPS is expected to range from $0.75 to $0.95. The CEO anticipates a Q4 revenue rebound to levels consistent with Q1 and Q2, driven by AI packaging spend.

Additional News
Onto Innovation announced the pending acquisition of Semilab, which is expected to add over $130 million in annual revenue and be immediately accretive to EPS. This strategic move is aligned with the company’s focus on advanced packaging technologies and is expected to bolster its market position. Additionally, the company plans to enhance its AI packaging capabilities, with the Dragonfly 3Di metrology and AI packaging solutions positioned as key growth drivers. These developments underscore Onto Innovation’s commitment to innovation and its strategic vision for future growth in the semiconductor industry.