Onto Innovation Inc ONTO reported second-quarter 2024 earnings of $1.32 per share, which beat the Zacks Consensus Estimate by 10.9%. The bottom line compared favorably with the prior-year quarter's 79 cents per share.
Revenues of $242.3 million beat the Zacks Consensus Estimate by 2.9%. The top line expanded 27.1% year over year. The uptick was largely driven by the expansion of pilot lines for high-performance computing, which incorporates cutting-edge gate-all-around transistor architecture and high-bandwidth memory to support the growing demand in the AI sector.
Revenues surpassed the high end of the company’s guided range of $230-$240 million. Management highlighted a record revenue of $164 million from specialty and advanced packaging customers. This growth was significantly driven by demand from AI packaging customers.
ONTO secured more than $300 million in volume purchase agreements from two major customers. These agreements, which extend through 2025, pertain to investments in AI advanced packaging and gate-all-around technologies.
Healthy momentum in advanced nodes sales was driven by the success of ONTO’s Atlas and Iris systems. These systems are pivotal in supporting emerging gate-all-around devices.
In addition, it bolstered its product portfolio with the introduction of the JetStep X500 lithography tool, specifically crafted for next-generation glass substrates used in panel-level packaging.
Onto Innovation Inc. Price, Consensus and EPS Surprise 
Onto Innovation Inc. price-consensus-eps-surprise-chart | Onto Innovation Inc. Quote
Segmental Performance
Advanced nodes revenues of $27 million increased 45% sequentially.
Specialty devices and advanced packaging revenues of $158 million witnessed a marginal sequential rise. Revenues from software and services were up 4% sequentially to $44 million.
Sales from specialty devices and advanced packaging, and advanced node markets contributed 69% and 12% to revenues, respectively. Software and services accounted for 19% of the top line.
Margin Details
Non-GAAP operating expenses were $64.4 million, up 7.5% from $60 million in the prior-year quarter, owing to extensive investments in applications engineering.
Non-GAAP gross profit increased to $129 million from $100.5 million in the year-earlier quarter. Non-GAAP gross margin remained flat year over year at 53%.
Non-GAAP operating income was $64.5 million compared with $40.6 million in the year-ago quarter. Non-GAAP operating margin rose to 27% from 21%.
Balance Sheet
As of Jun 29, 2024, the company had $786 million in cash, cash equivalents and marketable securities with $148.4 million of total current liabilities compared with $740.9 million and $147.1 million, respectively, as of Mar 30, 2024. Accounts receivable was $237.8 million.
Q3 Outlook
Management expects revenues in the range of $245-$255 million. It anticipates continued momentum in advanced packaging and the adoption of gate-all-around transistor architecture at several customers to positively impact top-line growth in 2025. The Zacks Consensus Estimate is pegged at $231.1 million.
Non-GAAP earnings per share are projected to be between $1.25 and $1.35. The consensus mark is pegged at $1.18.
GAAP earnings per share are expected to range from 98 cents to $1.08.
Zacks Rank
Onto Innovation currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Companies
BlackBerry’s BB first-quarter fiscal 2025 adjusted loss per share of 3 cents was narrower than the company’s estimate of a loss of 4-6 cents. In the year-ago quarter, it reported non-GAAP earnings of 6 cents per share. The Zacks Consensus Estimate was pegged at a loss of 4 cents per share.
Shares of BB have lost 53.4% in the past year.
Badger Meter, Inc BMI reported earnings per share (EPS) of $1.12 for second-quarter 2024, beating the Zacks Consensus Estimate by 14.3%. Also, the bottom line compared favorably with the year-ago quarter’s EPS of 76 cents.
Shares of BMI have gained 17.1% in the past year.
SAP SE SAP reported second-quarter 2024 non-IFRS earnings of €1.10 ($1.18) per share, climbing 59% from the year-ago quarter’s levels. The Zacks Consensus Estimate was pegged at $1.01.
In the past year, shares of SAP have gained 49.6%.
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