Onto Innovation's Q4 Earnings & Revenues Top, Up Y/Y on AI Innovations

Onto Innovation Inc. ONTO reported fourth-quarter 2024 earnings per share of $1.51, which beat the Zacks Consensus Estimate by 8.6%. The bottom line compared favorably with the prior-year quarter's $1.06.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Quarterly revenues of $264 million beat the Zacks Consensus Estimate by 1.7%. The top line expanded 20.6% year over year, nearing the high end of management’s guidance ($253-$267 million). The company delivered its sixth consecutive quarter of growth, driven by robust demand from advanced nodes and advanced packaging markets.Specialty devices and advanced packaging revenues (64% of total revenues) of $170 million rose 5% sequentially.  Revenues from the Advanced nodes (18%) market jumped 12% quarter over quarter to $48 million.Revenues from Software and services (18%) fell 4% sequentially to $46 million. Onto Innovation Inc. Price, Consensus and EPS Surprise Onto Innovation Inc. price-consensus-eps-surprise-chart | Onto Innovation Inc. QuoteONTO continues to capitalize on the increasing demand for AI-driven semiconductor solutions, next-generation transistor technology and advanced packaging. For 2024, revenues surged 21% year over year to $987 million. It reported a 180% increase in AI packaging revenues compared to 2023, highlighting the industry’s shift toward high-performance computing and AI-driven applications.Onto Innovation launched new products designed to support next-generation 3D interconnect technology and inspection tools for unpatterned wafers, panel-level packaging and compound semiconductors. Also, its advanced nodes revenues improved for the fourth consecutive quarter. With increasing investments in gate all around transistor technology, ONTO expects to sustain the growth momentum in 2025 as well.Margin DetailsNon-GAAP operating expenses totaled $68.4 million, up 21.4% year over year. The metric reached the upper end of the guidance on higher R&D investments throughout the quarter. Non-GAAP gross profit rose to $143.9 million from $112.8 million in the year-earlier quarter. Non-GAAP gross profit margin expanded to 55% from 52%.Non-GAAP operating income was $75.5 million compared with $56.4 million in the year-ago quarter. Non-GAAP operating margin was 29%, up from 26% in the previous-year quarter.Balance Sheet As of Dec. 28, 2024, the company had $852.3 million in cash, cash equivalents and marketable securities with $170 million of total current liabilities compared with $855.4 million and $144.7 million, respectively, as of Sept. 28, 2024.  Accounts receivable was $308.1 million.As of Dec. 28, 2024, cash generated from operations soared 43% year over year to $246 million.Q1 2025 GuidanceManagement expects revenues in the range of $260-$274 million. The Zacks Consensus Estimate is pegged at $256.8 million.Non-GAAP earnings per share are projected to be between $1.40 and $1.54. We expect the metric to be $1.39.GAAP earnings per share are expected to range from $1.14 to $1.28.ONTO’s Zacks RankOnto Innovation currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Recent Performance of Other CompaniesPTC Inc PTC reported first-quarter fiscal 2025 non-GAAP EPS of $1.10, beating the Zacks Consensus Estimate by 20.9%. The company reported non-GAAP EPS of $1.11 in the prior-year quarter. In the past year, shares of PTC have declined 4.8%.CDW Corporation CDW reported fourth-quarter 2024 non-GAAP EPS of $2.48, beating the Zacks Consensus Estimate of $2.33. However, the bottom line contracted 3.5% year over year.In the past year, CDW shares have declined 15.9%.Western Digital Corporation WDC reported second-quarter fiscal 2025 non-GAAP earnings of $1.77 per share, surpassing the Zacks Consensus Estimate of $1.75. The company incurred a loss of 75 cents per share in the prior-year quarter. Shares of WDC have gained 11.3% in the past year. Free Today: Profiting from The Future’s Brightest Energy SourceThe demand for electricity is growing exponentially. At the same time, we’re working to reduce our dependence on fossil fuels like oil and natural gas. Nuclear energy is an ideal replacement.Leaders from the US and 21 other countries recently committed to TRIPLING the world’s nuclear energy capacities. 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