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

Onto Innovation (NYSE:ONTO) released its quarterly earnings results on Thursday. The semiconductor company reported $1.93 EPS for the quarter, topping the consensus estimate of $1.69 by $0.24, FiscalAI reports. The business had revenue of $343.13 million for the quarter, compared to analysts’ expectations of $325.29 million. Onto Innovation had a return on equity of 13.19% and a net margin of 11.84%.The company’s revenue was up 35.3% compared to the same quarter last year. During the same quarter in the previous year, the firm posted $1.25 earnings per share. 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 on Friday, hitting $307.78. 2,093,955 shares of the stock traded hands, compared to its average volume of 1,136,619. The company has a market capitalization 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 1-year low of $93.50 and a 1-year high of $386.46. The company’s fifty day moving average is $297.04 and its 200 day moving average is $256.05.

Hedge Funds Weigh In On Onto Innovation

A number of hedge funds have recently added to or reduced their stakes in the business. Wellington Management Group LLP raised its holdings in shares of Onto Innovation by 1,217.0% during the third quarter. Wellington Management Group LLP now owns 1,398,995 shares of the semiconductor company’s stock worth $180,778,000 after purchasing an additional 1,292,772 shares during the period. Paradigm Capital Management Inc. NY boosted its holdings in shares of Onto Innovation by 1.2% in the 4th quarter. Paradigm Capital Management Inc. NY now owns 1,125,838 shares of the semiconductor company’s stock valued at $177,725,000 after buying an additional 12,999 shares during the period. Franklin Resources Inc. boosted its holdings in shares of Onto Innovation by 65.2% in the 3rd quarter. Franklin Resources Inc. now owns 1,114,501 shares of the semiconductor company’s stock valued at $144,016,000 after buying an additional 440,035 shares during the period. Rafferty Asset Management LLC grew its position in shares of Onto Innovation by 62.7% during the 2nd quarter. Rafferty Asset Management LLC now owns 639,566 shares of the semiconductor company’s stock valued at $64,551,000 after buying an additional 246,359 shares during the last quarter. Finally, AQR Capital Management LLC grew its position in shares of Onto Innovation by 315.8% during the 4th quarter. AQR Capital Management LLC now owns 615,651 shares of the semiconductor company’s stock valued at $97,187,000 after buying an additional 467,587 shares during the last quarter. Institutional investors and hedge funds own 98.35% of the company’s stock.

Onto Innovation News Roundup

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

Wall Street Analyst Weigh In

Several equities research analysts have issued reports on the company. Weiss Ratings restated a “hold (c)” rating on shares of Onto Innovation in a report on Friday, July 24th. Stifel Nicolaus set a $350.00 target price on Onto Innovation and gave the company a “buy” rating in a research note on Friday, April 17th. Cantor Fitzgerald increased their target price on Onto Innovation from $350.00 to $410.00 and gave the company an “overweight” rating in a research note on Monday, June 29th. Freedom Capital raised shares of Onto Innovation to a “strong-buy” rating in a research report on Wednesday, June 17th. Finally, Zacks Research upgraded shares of Onto Innovation from a “hold” rating to a “strong-buy” rating in a research note on Tuesday, July 14th. Two investment analysts have rated the stock with a Strong Buy rating, nine have assigned a Buy rating and one has issued a Hold rating to the company’s stock. According to data from MarketBeat.com, Onto Innovation currently has a consensus rating of “Buy” and an average price target of $378.11.

About Onto Innovation

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.