Onto Innovation (NYSE:ONTO) Releases Quarterly Earnings Results, Beats Expectations By $0.24 EPS

Onto Innovation (NYSE:ONTO) issued its earnings results on Thursday. The semiconductor company reported $1.93 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.69 by $0.24, FiscalAI reports. The business had revenue of $343.13 million during the quarter, compared to analysts’ expectations of $325.29 million. Onto Innovation had a net margin of 11.84% and a return on equity of 13.19%. The company’s revenue for the quarter was up 35.3% on a year-over-year basis. During the same quarter in the prior year, the business posted $1.25 EPS. Onto Innovation updated its Q3 2026 guidance to 2.180-2.380 EPS.

Here are the key takeaways from Onto Innovation’s conference call:

• Record Q2 results exceeded the high end of guidance, with revenue of $343 million, up 18% sequentially and 35% year over year, while EPS reached $1.93.
• Strong AI-related demand drove advanced packaging and inspection growth, including a 30% sequential increase in Dragonfly revenue and more than $200 million of Dragonfly orders from one OSAT, primarily for delivery in 2027.
• The company raised its second-half revenue growth outlook to more than 25% over the first half, expects Q4 revenue to exceed Q3, and increased its full-year advanced packaging growth forecast to approximately 80%.
• Onto reported a record backlog exceeding $1.1 billion, with roughly 30%-40% tied to 2027, supporting management’s confidence in continued growth across advanced packaging, HBM, logic, and memory.
• Profitability improved substantially, with gross margin reaching 57% and operating margin 30% in Q2; management expects margins to rise further to approximately 32% in Q3 and at least 33% by year-end.

Onto Innovation Price Performance

Shares of ONTO stock traded up $39.08 during mid-day trading on Friday, hitting $307.78. The stock had a trading volume of 2,093,955 shares, compared to its average volume of 1,136,619. The firm has a market cap of $15.31 billion, a PE ratio of 115.71, a PEG ratio of 1.26 and a beta of 1.59. Onto Innovation has a fifty-two week low of $93.50 and a fifty-two week high of $386.46. The company’s 50-day simple moving average is $297.04 and its 200-day simple moving average is $256.05.

Onto Innovation News Summary

Here are the key news stories impacting Onto Innovation this week:

• Positive Sentiment: Q2 results beat expectations: Onto reported adjusted earnings of $1.93 per share versus the $1.69 consensus estimate, while revenue reached a record $343.1 million, up 35.3% year over year and above the $325.3 million expected. Profitability also improved, with gross profit up 50.1% and operating profit nearly doubling. Onto Innovation earnings report
• Positive Sentiment: Raised outlook significantly: Third-quarter EPS guidance of $2.18-$2.38 and revenue guidance of $380 million-$400 million are well above Wall Street estimates of $1.93 and $351.8 million, respectively. The stronger forecast supports expectations for accelerating near-term growth. Onto Innovation second-quarter results
• Positive Sentiment: AI and advanced packaging demand remain strong: Management said backlog exceeded $1.1 billion, with orders extending into 2027. Demand for advanced packaging equipment tied to AI chip production is strengthening the company’s visibility and second-half outlook. ONTO Q2 earnings call highlights
• Positive Sentiment: Analyst confidence increased: Needham raised its price target from $330 to $360 and maintained a Buy rating, reinforcing the positive reaction to the earnings and guidance. Analyst price target update
• Positive Sentiment: Industrywide catalyst: A proposed Tesla-SpaceX “Terafab” chip-manufacturing buildout could increase long-term demand for semiconductor inspection and metrology equipment from Onto and other suppliers. Tesla-SpaceX Terafab chip equipment outlook

Hedge Funds Weigh In On Onto Innovation

A number of institutional investors and hedge funds have recently made changes to their positions in the stock. Transamerica Financial Advisors LLC increased its holdings in shares of Onto Innovation by 188.5% in the 4th quarter. Transamerica Financial Advisors LLC now owns 176 shares of the semiconductor company’s stock valued at $28,000 after purchasing an additional 115 shares in the last quarter. Danske Bank A S acquired a new position in Onto Innovation during the third quarter worth about $39,000. Los Angeles Capital Management LLC acquired a new position in Onto Innovation during the fourth quarter worth about $39,000. CIBC Private Wealth Group LLC increased its holdings in Onto Innovation by 109.4% in the fourth quarter. CIBC Private Wealth Group LLC now owns 245 shares of the semiconductor company’s stock valued at $39,000 after buying an additional 128 shares in the last quarter. Finally, Parallel Advisors LLC increased its holdings in Onto Innovation by 20.6% in the fourth quarter. Parallel Advisors LLC now owns 339 shares of the semiconductor company’s stock valued at $54,000 after buying an additional 58 shares in the last quarter. 98.35% of the stock is owned by institutional investors and hedge funds.

Analyst Upgrades and Downgrades

A number of equities research analysts recently weighed in on the stock. Zacks Research raised shares of Onto Innovation from a “hold” rating to a “strong-buy” rating in a research report on Tuesday, July 14th. Deutsche Bank Aktiengesellschaft assumed coverage on Onto Innovation in a research report on Friday, June 5th. They set a “buy” rating and a $350.00 target price on the stock. Stifel Nicolaus set a $350.00 target price on Onto Innovation and gave the company a “buy” rating in a report on Friday, April 17th. Oppenheimer raised their price target on Onto Innovation from $370.00 to $450.00 and gave the stock an “outperform” rating in a research note on Monday, June 22nd. Finally, Evercore reaffirmed an “outperform” rating and set a $390.00 price target on shares of Onto Innovation in a research report on Friday. Two investment analysts have rated the stock with a Strong Buy rating, nine have issued a Buy rating and one has issued a Hold rating to the stock. According to data from MarketBeat.com, the company has a consensus rating of “Buy” and a consensus price target of $378.11.

Onto Innovation Company Profile

Onto Innovation (NYSE:ONTO) is a global supplier of advanced process control and inspection systems for semiconductor and electronics manufacturers. The company’s solutions span metrology, inspection, defect review and lithography mask repair, helping customers optimize yield, reduce costs and improve device performance. By integrating high-resolution optical and e-beam tools with sophisticated software analytics, Onto Innovation enables wafer, mask and advanced packaging producers to maintain tight process control across leading-edge nodes and specialty applications.

Key products include high-throughput wafer metrology systems, optical and e-beam defect inspection platforms, mask inspection and repair tools, and data-driven software for yield management and process optimization.