Onto Innovation Reports Q3 Revenue Decline and Strategic Acquisition Plans

Onto Innovation Inc. reported its financial results for the third quarter and nine months ended September 27, 2025, revealing a decline in revenue and net income compared to the same periods in the previous year. The company generated revenue of $218.2 million for the third quarter, a decrease of 13.5% from $252.2 million in the same quarter of 2024. For the nine-month period, revenue increased slightly to $738.4 million from $723.4 million year-over-year. Net income for the third quarter was $28.2 million, down from $53.1 million in the prior year, while net income for the nine months was $126.2 million, compared to $152.9 million in 2024.

The decline in quarterly revenue was attributed primarily to reduced sales to DRAM and NAND customers in the advanced node market, as well as lower sales to foundry customers in the specialty devices and advanced packaging markets. Gross profit for the third quarter was $110.6 million, representing a gross margin of 50.7%, down from 54.1% in the same quarter last year. The decrease in gross profit margin was influenced by restructuring expenses and inventory write-downs. Operating expenses increased to $86.9 million for the third quarter, compared to $83.3 million in the prior year, driven by higher research and development costs.

In terms of strategic developments, Onto Innovation is in the process of acquiring Semilab USA LLC for $432.3 million in cash and shares, a reduction from the initial agreement of $475 million. This acquisition is expected to enhance the company's capabilities in the semiconductor market. The company incurred $4.6 million in transaction-related costs during the nine-month period. Additionally, Onto Innovation's employee headcount stood at approximately 1,593 as of September 27, 2025, reflecting ongoing investments in talent to support its growth initiatives.

The company reported a significant increase in cash and cash equivalents, totaling $603.1 million at the end of the third quarter, up from $212.9 million at the end of the previous fiscal year. This increase was primarily due to strong cash generated from operating activities, which amounted to $233.3 million for the nine months ended September 27, 2025. The company also maintained a robust marketable securities portfolio valued at $380.8 million. Looking ahead, Onto Innovation anticipates continued challenges in the semiconductor market but remains focused on leveraging its resources to enhance its market position and drive future growth.