Onto Innovation Inc. (NYSE: ONTO) reported Q3 EPS of $0.40, $0.06 better than the analyst estimate of $0.34. Revenue for the quarter came in at $126.5 million versus the consensus estimate of $128.08 million.

• Revenue of $126.5 million was impacted by the timing in metrology spending predominantly from two customers.
• Specialty device and advanced packaging revenue surged 44% in the quarter driven by strong demand for process control for the 5G ecosystem and advanced packaging for high-power computing (HPC) and RF modules.
• Gross margin improved to 54%, above previous guidance.
• Inspection revenue grew 21% over the second quarter with strong demand for both 2D and 3D systems.
• Cash and marketable securities increased $28.3 million in the third quarter and cash from operations was 21% of revenue in the quarter.

Michael Plisinski, chief executive officer of Onto Innovation commented, “The Onto Innovation team is making great progress to position the company for long term sustainable growth. Our ability to execute on our strategy is clear from the growth in the specialty and advanced packaging markets in the third quarter. We are also encouraged by the traction for our new metrology suite across DRAM, logic, and NAND customers.”

He continued, “We received multiple orders in the third quarter for our new Atlas® V system, which became commercially available for advanced nodes below 5nm in the second quarter. Our new IMPULSE® V system completed qualification at two suppliers of high-performance CMP (chemical metal polishing) process tools and has demonstrated best-in-class productivity enabling higher sampling rates for next generation CMP as well as higher measurement sensitivity for thinner films. Our new Element™ system, which measures material composition, saw broader adoption by memory manufacturers for incoming bulk silicon and dielectric monitoring in their fabs.”

Plisinski concluded, “With a projected 19% growth for the fourth quarter and the momentum building for our new product suite, we are well positioned to be a strategic process solutions partner our customers throughout the semiconductor value chain need.”

GUIDANCE:

Onto Innovation Inc. sees Q4 2020 EPS of $0.55-$0.66, versus the consensus of $0.48. Onto Innovation Inc. sees Q4 2020 revenue of $145-155 million, versus the consensus of $144.06 million.

• The Company is currently anticipating revenue for the fourth quarter 2020 to be in the range of $145 to $155 million. This guidance assumes that the safety protocols in place continue to limit the impact of COVID-19 on our factories and our suppliers. The guidance also assumes no additional restrictions of shipments to China. Within this revenue range the Company is expecting GAAP net income per diluted share to be in the range of $0.35 to $0.49 and non-GAAP net income per diluted share to be in the range of $0.55 to $0.66.

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