Onto Innovation Inc. (NYSE: ONTO) reported Q4 EPS of $0.72, $0.12 better than the analyst estimate of $0.60. Revenue for the quarter came in at $155.1 million versus the consensus estimate of $150.54 million.

2020 Fourth Quarter and Full Year Highlights

• Quarterly revenue of $155.1 million increased 23% compared to $126.5 million in the 2020 third quarter and exceeded management’s guidance.
• Revenue from RF customers supporting the 5G ramp increased 100% over the third quarter.
• Aspect® metrology system accepted by a top three supplier of 3D NAND, displacing the incumbent metrology tool in the fourth quarter.
• Penetrated a leading DRAM customer with first IMPULSE® integrated metrology systems gaining significant market share and becoming process tool of record to support significant ramp in 2021.
• Achieved annualized merger cost synergies of $24 million driving improved combined company results.
• Technology synergies enabled the introduction of the new Iris™ films system resulting in multiple orders delivered to a top three semiconductor manufacturer.
• New product introductions in metrology and inspection expected to increase 2021 TAM and SAM by over 20%.
• Entered long-term operating model with fourth quarter Non-GAAP operating margin of 24%.
• Cash and marketable securities increased $33 million in the fourth quarter and cash from operations was 21% of revenue in the quarter.

Michael Plisinski, chief executive officer of Onto Innovation commented, “The extraordinary challenges of integrating two similar sized companies while simultaneously operating under the constraints of a global pandemic underscored the strength of the Onto Innovation team. Together, we released six new products and expanded our growth opportunities in new markets for advanced packaging and image sensors as well as in the advanced nodes for logic, DRAM, and 3D-NAND. The strong revenue growth in the fourth quarter was a combination of market strength in memory and RF communications in support of the initial 5G handset ramp as well as the acceptance of several of our new product releases.”

Plisinski concluded, “In addition to expanding our market opportunities, we are deepening our customer partnerships across the value chain by working collaboratively on identifying future challenges and potential solutions. This is expanding our view of the horizon and illuminating exciting possibilities for our team. Our guidance for the first quarter reflects our confidence for what is ahead. Secular demand for 5G enabled handsets and base stations continues to increase. High performance computing engines for AI and data center applications also remain strong and are driving demand for DRAM. The electronics industry is profoundly changing the world in which we live. We are excited to do our part to ensure it’s a better planet. Our activities began as we developed our first corporate responsibility report and created our corporate environmental goals. This year gave us many examples of how critical this is for our society and the environment and we look forward to contributing to this effort.”

GUIDANCE:

Onto Innovation Inc. sees Q1 2021 EPS of $0.62-$0.76, versus the consensus of $0.58. Onto Innovation Inc. sees Q1 2021 revenue of $155-169 million, versus the consensus of $156.62 million.

The Company is currently anticipating revenue for the first quarter 2021 to be in the range of $155 million to $169 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 upper end of this guidance is predicated on the approval of the Company’s application for a license to deliver an ordered product that was recently restricted from shipping 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 $0.62 to $0.76.

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