Onto Innovation Inc. (NYSE: ONTO) reported Q1 EPS of $0.73, $0.05 better than the analyst estimate of $0.68. Revenue for the quarter came in at $169.3 million versus the consensus estimate of $162.22 million.

First Quarter 2021 GAAP Financial Results

• First quarter revenue totaled $169.3 million, an increase of 9% compared with $155.1 million for the fourth quarter of 2020.
• Gross profit margin was 53% of revenue in the first quarter, compared to 49% in the fourth quarter of 2020. Fourth quarter gross margin was negatively impacted by an inventory reserve for a discontinued product line.
• Operating expenses totaled $63.0 million, an increase of $2.4 million compared to $60.6 million in the fourth quarter of 2020.
• Operating income was $27.5 million, an increase of $12.8 million compared to $14.7 million in the fourth quarter of 2020.
• GAAP net income was $24.1 million, or $0.49 per diluted share and at the high-end of guidance, compared with $19.9 million, or $0.40 per diluted share, for the 2020 fourth quarter.

First Quarter 2021 Non-GAAP Financial Results

• Gross profit margin was 54% of revenue for both the first quarter of 2021 and the fourth quarter of 2020.
• Operating income was $41.9 million, an increase of $4.3 million and represented 25% of revenue in the first quarter of 2021. This compared to operating income of $37.6 million in the fourth quarter of 2020.
• Non-GAAP net income was $36.3 million, or $0.73 per diluted share compared to non-GAAP net income of $35.6 million, or $0.72 per diluted share in the fourth quarter of 2020.
• Non-GAAP results exclude merger-related expenses, restructuring costs, litigation expenses and the amortization of intangible assets as detailed in the accompanying tables.

Michael Plisinski, chief executive officer for Onto Innovation commented, “The demand for our front-end and back-end products continues to increase as global pressure for a variety of the semiconductor markets we serve climbs higher. The strong demand we see in the advanced nodes was driven by greater adoption of our optical metrology solutions for 5nm and 3nm process ramps. In addition to increases in mainstay product sales, we are encouraged by the growing adoption of our new metrology suite with both tier one and smaller semiconductor manufacturers placing orders for delivery this year.”

Plisinski continued, “Multiple secular drivers provided stronger than expected demand in advanced packaging. We saw expansions at foundry and OSAT customers to support high performance computing, specialty devices, particularly in 5G smartphones, and baseband RF. At the midpoint of second quarter guidance, our strengthened outlook reflects growth of 26% over the first half of 2020 and does not included any additional upside from the approval of pending license applications for companies in China.”

GUIDANCE:

Onto Innovation Inc. sees Q2 2021 EPS of $0.76-$0.85, versus the consensus of $0.71. Onto Innovation Inc. sees Q2 2021 revenue of $173-184 million, versus the consensus of $166.7 million.

• The Company is currently anticipating revenue for the second quarter of 2021 to be in the range of $173 million to $184 million. This guidance assumes that the safety protocols in place continue to limit the impact of COVID-19 on our factories and our suppliers. Within this revenue range the Company is expecting GAAP net income per diluted share to be in the range of $0.58 to $0.67 and non-GAAP net income per diluted share to be in the range of $0.76 to $0.85.

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