Onto Innovation Inc. reported record revenue of $266.9 million for its fourth quarter of 2025, a 1.1% year‑over‑year increase from $263.9 million in Q4 2024 and a 22% sequential jump from the prior quarter. Full‑year revenue reached $1.005 billion, up 1.8% from $987.3 million in 2024, marking the first time the company has surpassed the $1 billion threshold. Non‑GAAP diluted earnings per share for the quarter were $1.26, slightly below the consensus estimate of $1.27, while GAAP operating income was $13.9 million and non‑GAAP operating income was $67.2 million.
Advanced packaging and specialty devices drove the majority of the revenue, contributing approximately $145 million, while advanced nodes added $72 million. The company’s GAAP gross margin fell to 46.4% from 50.2% in Q4 2024, reflecting a mix shift toward lower‑margin segments, whereas non‑GAAP gross margin remained stable at 54.6% compared with 54.5% in the prior year. Operating income figures—$13.9 million GAAP and $67.2 million non‑GAAP—illustrate the impact of the margin compression and the benefits of scale in higher‑margin advanced packaging.
"We delivered a strong fourth quarter as revenue, gross margin and operating margin all met or exceeded expectations. We reported record revenue of $267 million, representing a 22% increase from Q3. For the full year, revenue finished at $1.005 billion, also a record for Onto Innovation. Gross margin for Q4 improved by about 50 basis points to 54.6% from Q3. Operating margins improved to 25.2% in the fourth quarter, an increase of 410 basis points from the third quarter. Adjusted diluted earnings per share in Q4 were $1.26," said CFO Brian Roberts during the earnings call.
The company guided for first‑quarter 2026 revenue of $275 million to $285 million, with a projected gross margin of 54.6% to 55.6%, indicating confidence in continued demand for its advanced packaging and specialty device solutions. Guidance for non‑GAAP diluted EPS in Q1 2026 is $1.26 to $1.36, slightly above analyst expectations, underscoring management’s belief that the company can sustain margin expansion as it scales its high‑growth AI and HBM‑related offerings.
"2025 concluded on a strong note for Onto Innovation, highlighted by record revenue for both the fourth quarter and the full year, the successful acquisition of select product lines from Semilab International, and the shipment of multiple next‑generation Dragonfly® systems for high‑resolution 2D applications to customers beginning their evaluation periods," CEO Mike Plisinski said. "With global AI investment fueling a robust upcycle in semiconductor capital equipment spending, our deep and broad portfolio across advanced packaging, advanced nodes and specialty devices positions us to capitalize on the high‑growth segments of the market. We are also seeing strong customer engagement across our new products to address their most critical metrology and inspection challenges, reinforcing our confidence in our ability to outgrow the semiconductor equipment market in 2026 and beyond."
The company’s strategic moves—such as the acquisition of Semilab’s product lines and a $240 million volume purchase agreement with an HBM manufacturer—provide multi‑year revenue visibility and strengthen its position in the AI‑driven memory market. Headwinds include an expected 10% decline in power semiconductor revenue in 2026 and increased operating expenses from the Semilab integration, but the company’s focus on high‑margin advanced packaging and specialty devices is expected to offset these pressures and support the robust guidance for the first quarter of 2026.
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