Record
quarterly revenue of $241 million exceeds guidance, resulting in 43%
year-over-year growth
Record quarterly net income of $53 million
increased 121% over the same period last year
Onto Innovation Inc. (NYSE: ONTO) (“Onto Innovation,” “Onto,” or
the “Company”) today announced financial results for the first
quarter of 2022.
2022 First Quarter Financial Highlights
- Record quarterly revenue of $241 million grew 43%
year-over-year.
- Quarterly gross profit margin of 54% increased from 53% in the
same period last year.
- First quarter operating margin improved to 24% GAAP and 31%
non-GAAP, an increase of 50% and 24%, respectively compared to the
same period last year.
- Quarterly diluted earnings per share of $1.07 increased 118%
year-over-year and non-GAAP diluted earnings per share of $1.31
increased 79% year-over-year.
- Record cash balance totaled $542 million, or $10.96 per
share.
2022 First Quarter Business Highlights
- Advanced Nodes revenue of $100 million grew 42%
year-over-year.
- Specialty and Advanced Packaging revenue of $100 million grew
58% over the same period last year.
- Software and Services revenue of $41 million grew 17%
year-over-year.
Onto Innovation Inc.
Key Quarterly Financial
Data
(In thousands, except per
share amounts)
GAAP
April 2, 2022
January 1, 2022
March 27, 2021
Revenue
$
241,350
$
225,644
$
169,279
Gross profit margin
54
%
55
%
53
%
Operating income
$
58,744
$
49,855
$
27,485
Net income
$
53,330
$
46,737
$
24,113
Net income per diluted share
$
1.07
$
0.94
$
0.49
NON-GAAP
April 2, 2022
January 1, 2022
March 27, 2021
Revenue
$
241,350
$
225,644
$
169,279
Gross profit margin
54
%
55
%
54
%
Operating income
$
74,264
$
69,036
$
41,874
Net income
$
65,628
$
61,218
$
36,339
Net income per diluted share
$
1.31
$
1.23
$
0.73
Michael Plisinski, chief executive officer for Onto Innovation,
commented, “The strong start to the year reflects the continued
robust demand for semiconductor manufacturing equipment across all
of our served markets. However, the higher demand for equipment is
also creating an environment of ongoing supply chain shortages and
challenges impacting the industry to varying degrees. I am proud of
how the Onto Innovation team and our supplier partners worked
together to mitigate many of these issues and exceeded our
expectations for shipments of our core products in the first
quarter.”
“While we have growing demand and orders for our products, which
remain very solid across our served markets over the next several
quarters, we expect supply chain cost and delivery issues to
continue to be factors through the end of the year.”
First Quarter 2022 GAAP Financial Results
- First quarter revenue totaled $241.4 million, an increase of
43% compared to $169.3 million in the 2021 first quarter and an
increase of 7% when compared to $225.6 million in the 2021 fourth
quarter.
- Gross profit margin was 54.3% of revenue compared to 53.4% in
the first quarter of 2021 and 54.9% in the previous quarter. The
sequential quarterly decrease was primarily due to increasing
freight costs.
- Operating expenses for the first quarter of 2022 totaled $72.3
million, a decrease of 2% compared to $73.9 million in the fourth
quarter of 2021. The quarter-over-quarter decrease in operating
expenses was mainly due to lower merger and acquisition costs.
- GAAP net income for the first quarter of 2022 exceeded guidance
at $53.3 million, or $1.07 per diluted share, compared to $46.7
million, or $0.94 per diluted share, for the 2021 fourth
quarter.
First Quarter 2022 Non-GAAP Financial Results
- First quarter 2022 non-GAAP net income was $65.6 million, or
$1.31 per diluted share, and was above the high end of previous
guidance, compared to non-GAAP net income of $61.2 million, or
$1.23 per diluted share, in the fourth quarter of 2021. Non-GAAP
results exclude merger-related and litigation expenses,
restructuring costs and the amortization of intangible assets as
detailed in the accompanying tables.
Balance Sheet
- As of April 2, 2022, cash and marketable securities increased
$30.6 million from the fourth quarter and ended the quarter at
$541.9 million.
- Working capital increased $54.0 million from the 2021 fourth
quarter and ended the quarter at $847.6 million.
- Accounts receivable totaled $206.7 million as of the end of the
first quarter and inventory ended the quarter at $263.0
million.
Outlook
Management provided an outlook for the second quarter, the
fiscal period ending July 2, 2022, that excludes revenue from the
Company’s new lithography systems, awaiting customer acceptance.
Based on current estimates, management expects:
- $234 to $248 million in revenue.
- $0.90 to $1.09 in diluted GAAP EPS.
- $1.16 to $1.35 in diluted non-GAAP EPS.
The guidance assumes that well-publicized supply chain issues
will not materially impact our suppliers’ remaining scheduled
deliveries in the second quarter.
Webcast & Conference Call Details
Onto Innovation will host a conference call at 4:30 p.m. Eastern
Time today, May 3, 2022, to discuss its first quarter 2022
financial results in greater detail. To participate in the call,
please dial (888) 204-4368 or international: +1 (929) 477-0402 and
reference conference ID 9289193 at least five (5) minutes prior to
the scheduled start time. A live webcast will also be available at
www.ontoinnovation.com.
To listen to the live webcast, please go to the website at least
fifteen (15) minutes early to register, download and install any
necessary audio software. There will be a replay of the conference
call available from 7:30 p.m. ET on May 3 until 7:30 p.m. ET on May
10, 2022. To access the replay, please dial (888) 203-1112 and
reference conference ID 9289193 at any time during that period. A
replay will also be available at www.ontoinnovation.com.
Discussion of Non-GAAP Financial Measures
The Company has provided in this release non-GAAP financial
measures, including non-GAAP net income and non-GAAP EPS, which
exclude amortization of acquisition-related intangible assets,
certain acquisition-related expenses and benefits, litigation
expenses and restructuring costs. Non-GAAP net income and non-GAAP
EPS can also exclude certain other gains and losses that are either
isolated or cannot be expected to occur again with any
predictability, tax provisions/benefits related to the previous
items, and significant discrete tax events. We exclude the above
items because they are outside of our normal operations and/or, in
certain cases, are difficult to forecast accurately for future
periods.
We utilize several different financial measures, both GAAP and
non-GAAP, in analyzing and assessing the overall performance of our
business, in making operating decisions, forecasting and planning
for future periods, and determining payments under compensation
programs. We consider the use of the non-GAAP measures to be
helpful in assessing the performance of the ongoing operation of
our business. We believe that disclosing non-GAAP financial
measures provides useful supplemental data that, while not a
substitute for financial measures prepared in accordance with GAAP,
allows for greater transparency in the review of our financial and
operational performance. We also believe that disclosing non-GAAP
financial measures provides useful information to investors and
others in understanding and evaluating our operating results and
future prospects in the same manner as management and in comparing
financial results across accounting periods and to those of peer
companies. More specifically, management adjusts for the excluded
items for the following reasons:
Amortization of purchased intangible assets: we do not acquire
businesses and assets on a predictable cycle. The amount of
purchase price allocated to the purchased intangible assets and the
term of amortization can vary significantly and are unique to each
acquisition or purchase. We believe that excluding amortization of
purchased intangible assets allows the users of our financial
statements to better review and understand the historic and current
results of our operations, and also facilitates comparisons to peer
companies.
Merger or acquisition related expenses and benefits: we incur
expenses or benefits with respect to certain items associated with
our mergers and acquisitions, such as transaction and integration
costs, change in control payments, adjustments to the fair value of
assets, etc. We exclude such expenses or benefits as they are
related to acquisitions and have no direct correlation to the
operation of our on-going business.
Restructuring charges: we incur restructuring and impairment
charges on individual or groups of employed assets, which arise
from unforeseen circumstances and/or often occur outside of the
ordinary course of our on-going business. Although these events are
reflected in our GAAP financials, these unique transactions may
limit the comparability of our on-going operations with prior and
future periods.
Significant litigation charges or benefits and legal costs: we
may incur charges or benefits as well as legal costs in connection
with litigation and other contingencies unrelated to our core
operations. We exclude these charges or benefits, when significant,
as well as legal costs associated with significant legal matters,
because we do not believe they are reflective of on-going business
and operating results.
Income tax expense: we estimate the tax effect of the items
identified to determine a non-GAAP annual effective tax rate
applied to the pretax amount in order to calculate the non-GAAP
provision for income taxes. We also adjust for items for which the
nature and/or tax jurisdiction requires the application of a
specific tax rate or treatment.
From time to time in the future, there may be other items
excluded if we believe that doing so is consistent with the goal of
providing useful information to investors and management.
There are limitations in using non-GAAP financial measures
because the non-GAAP financial measures are not prepared in
accordance with generally accepted accounting principles and may be
different from non-GAAP financial measures used by other companies.
The non-GAAP financial measures are limited in value because they
exclude certain items that may have a material impact on our
reported financial results. The presentation of this additional
information is not meant to be considered in isolation or as a
substitute for the directly comparable financial measures prepared
in accordance with GAAP in the United States. Investors should
review the reconciliation of the non-GAAP financial measures to
their most directly comparable GAAP financial measures as provided
in the tables accompanying this press release.
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
(the “Act”) which include Onto Innovation’s business momentum and
future growth; the benefit to customers of Onto Innovation’s
products and customer service; Onto Innovation’s ability to both
deliver products and services consistent with our customers’
demands and expectations and strengthen its market position; Onto
Innovation’s expectations regarding the semiconductor market
outlook; Onto Innovation’s second quarter 2022 financial outlook;
as well as other matters that are not purely historical data. Onto
Innovation wishes to take advantage of the “safe harbor” provided
for by the Act and cautions that actual results may differ
materially from those projected as a result of various factors,
including risks and uncertainties, many of which are beyond Onto
Innovation’s control. Such factors include, but are not limited to,
the length, severity and potential business impact of the COVID-19
pandemic, the Company’s ability to leverage its resources to
improve its position in its core markets; its ability to weather
difficult economic environments; its ability to open new market
opportunities and target high-margin markets; the strength/weakness
of the back-end and/or front-end semiconductor market segments;
fluctuations in customer capital spending and any potential impact
as a result of the novel coronavirus situation; the Company’s
ability to effectively manage its supply chain and adequately
source components from suppliers to meet customer demand; its
ability to adequately protect its intellectual property rights and
maintain data security; its ability to effectively maneuver global
trade issues and changes in trade and export license policies; the
Company’s ability to maintain relationships with its customers and
manage appropriate levels of inventory to meet customer demands;
and the Company’s ability to successfully integrate acquired
businesses and technologies. Additional information and
considerations regarding the risks faced by Onto Innovation are
available in Onto Innovation’s Form 10-K report for the year ended
January 1, 2022 and other filings with the Securities and Exchange
Commission. As the forward-looking statements are based on Onto
Innovation’s current expectations, the Company cannot guarantee any
related future results, levels of activity, performance or
achievements. Onto Innovation does not assume any obligation to
update the forward-looking information contained in this press
release.
About Onto Innovation
Onto Innovation is a leader in process control, combining global
scale with an expanded portfolio of leading-edge technologies that
include: Un-patterned wafer quality; 3D metrology spanning chip
features from nanometer scale transistors to large die
interconnects; macro defect inspection of wafers and packages;
elemental layer composition; overlay metrology; factory analytics;
and lithography for advanced semiconductor packaging. Our breadth
of offerings across the entire semiconductor value chain helps our
customers solve their most difficult yield, device performance,
quality, and reliability issues. Onto Innovation strives to
optimize customers’ critical path of progress by making them
smarter, faster and more efficient. Headquartered in Wilmington,
Massachusetts, Onto Innovation supports customers with a worldwide
sales and service organization. Additional information can be found
at www.ontoinnovation.com.
Source: Onto Innovation
Inc. ONTO-I
(Financial tables follow)
ONTO INNOVATION INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands) -
(Unaudited)
April 2,
2022
January 1,
2022
ASSETS
Current assets
Cash, cash equivalents and marketable
securities
$
541,911
$
511,343
Accounts receivable, net
206,695
177,205
Inventories
263,008
243,108
Prepaid and other assets
20,628
16,433
Total current assets
1,032,242
948,089
Net property, plant and equipment
81,689
82,094
Intangibles, net
579,323
593,092
Other assets
29,153
26,538
Total assets
$
1,722,407
$
1,649,813
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities
Accounts payable and accrued
liabilities
$
108,498
$
96,387
Other current liabilities
76,181
58,139
Total current liabilities
184,679
154,526
Other non-current liabilities
65,407
69,232
Total liabilities
250,086
223,758
Stockholders’ equity
1,472,321
1,426,055
Total liabilities and stockholders’
equity
$
1,722,407
$
1,649,813
ONTO INNOVATION INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per
share amounts) - (Unaudited)
Three Months Ended
April 2,
January 1,
March 27,
2022
2022
2021
Revenue
$
241,350
$
225,644
$
169,279
Cost of revenue
110,327
101,841
78,810
Gross profit
131,023
123,803
90,469
Operating expenses:
Research and development
26,341
24,836
21,964
Sales and marketing
15,632
15,822
13,104
General and administrative
16,487
19,598
15,559
Amortization
13,819
13,692
12,357
Total operating expenses
72,279
73,948
62,984
Operating income
58,744
49,855
27,485
Interest income, net
377
264
361
Other expense, net
(204
)
(64
)
(1,244
)
Income before income taxes
58,917
50,055
26,602
Provision for income taxes
5,587
3,318
2,489
Net income
$
53,330
$
46,737
$
24,113
Earnings per share:
Basic
$
1.08
$
0.95
$
0.49
Diluted
$
1.07
$
0.94
$
0.49
Weighted average shares
outstanding:
Basic
49,437
49,386
49,000
Diluted
49,915
49,847
49,572
ONTO INNOVATION INC.
NON-GAAP FINANCIAL
SUMMARY
(In thousands, except
percentage and per share amounts) - (Unaudited)
Three Months Ended
April 2, 2022
January 1, 2022
March 27, 2021
Revenue
$
241,350
$
225,644
$
169,279
Gross profit
$
131,018
$
123,963
$
91,029
Gross margin as percentage of revenue
54
%
55
%
54
%
Operating expenses
$
56,754
$
54,927
$
49,155
Operating income
$
74,264
$
69,036
$
41,874
Operating margin as a percentage of
revenue
31
%
31
%
25
%
Net income
$
65,628
$
61,218
$
36,339
Net income per diluted share
$
1.31
$
1.23
$
0.73
RECONCILIATION OF GAAP GROSS
PROFIT,
OPERATING EXPENSES AND
OPERATING INCOME TO NON-GAAP
GROSS PROFIT, OPERATING
EXPENSES AND OPERATING INCOME
(In thousands, except
percentages) - (Unaudited)
Three Months Ended
April 2, 2022
January 1, 2022
March 27, 2021
U.S. GAAP gross profit
$
131,023
$
123,803
$
90,469
Pre-tax non-GAAP items:
Merger and acquisition related
expenses
(5
)
160
254
Restructuring expenses
—
—
306
Non-GAAP gross profit
$
131,018
$
123,963
$
91,029
U.S. GAAP gross margin as a percentage of
revenue
54
%
55
%
53
%
Non-GAAP gross margin as a percentage of
revenue
54
%
55
%
54
%
U.S. GAAP operating expenses
$
72,279
$
73,948
$
62,984
Pre-tax non-GAAP items:
Merger and acquisition related
expenses
657
4,624
969
Litigation expenses
1,049
705
503
Amortization of intangibles
13,819
13,692
12,357
Non-GAAP operating expenses
56,754
54,927
49,155
Non-GAAP operating income
$
74,264
$
69,036
$
41,874
GAAP operating margin as a percentage of
revenue
24
%
22
%
16
%
Non-GAAP operating margin as a percentage
of revenue
31
%
31
%
25
%
ONTO INNOVATION INC.
RECONCILIATION OF GAAP NET
INCOME TO
NON-GAAP NET INCOME
(In thousands, except share
and per share data) - (Unaudited)
Three Months Ended
April 2, 2022
January 1, 2022
March 27, 2021
U.S. GAAP net income
$
53,330
$
46,737
$
24,113
Pre-tax non-GAAP items:
Merger and acquisition related
expenses
652
4,784
1,223
Restructuring expenses
—
—
306
Litigation expenses
1,049
705
503
Amortization of intangibles
13,819
13,692
12,357
Net tax provision adjustments
(3,222
)
(4,700
)
(2,163
)
Non-GAAP net income
$
65,628
$
61,218
$
36,339
Non-GAAP net income per diluted share
$
1.31
$
1.23
$
0.73
ONTO INNOVATION INC
SUPPLEMENTAL INFORMATION -
RECONCILIATION OF SECOND QUARTER 2022
GAAP TO NON-GAAP
GUIDANCE
Low
High
Estimated GAAP net income per diluted
share
$
0.90
$
1.09
Estimated non-GAAP items:
Amortization of intangibles
0.28
0.28
Litigation expenses
0.02
0.02
Net tax provision adjustments
(0.04
)
(0.04
)
Estimated non-GAAP net income per diluted
share
$
1.16
$
1.35
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220503006037/en/
Michael Sheaffer +1.978.253.6273
Mike.Sheaffer@OntoInnovation.com
Onto Innovation (NYSE:ONTO)
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