Onto Innovation Reports Q2 Fiscal 2025 Revenue Growth but Declining Net Income

Onto Innovation Inc. reported its financial results for the second quarter of fiscal 2025, revealing a revenue of $253.6 million, a 4.7% increase from $242.3 million in the same quarter of the previous year. For the six-month period ending June 28, 2025, revenue reached $520.2 million, up 10.4% from $471.2 million year-over-year. However, net income for the quarter decreased to $33.9 million, or $0.69 per diluted share, compared to $52.9 million, or $1.07 per diluted share, in the prior year. The decline in profitability was attributed to increased operating expenses and a reduction in gross profit margin, which fell to 48.2% from 52.9% in the same quarter last year.

The company experienced significant changes in its operating expenses, which rose to $89.9 million for the quarter, a 12% increase compared to the previous quarter. This rise was primarily driven by higher research and development costs, which increased to $35.3 million from $27.0 million, and general and administrative expenses, which rose to $25.0 million from $19.7 million. The increase in expenses was partly offset by a decrease in sales and marketing costs, which fell to $14.9 million from $18.9 million. The company also reported a restructuring expense of $6.2 million during the quarter.

In terms of strategic developments, Onto Innovation announced a definitive agreement to acquire Semilab USA LLC for $475 million in cash and stock, with a total transaction value of approximately $545 million. This acquisition is expected to close in the second half of 2025, pending regulatory approvals. The company incurred $2.5 million in transaction-related costs during the quarter, which were recorded under general and administrative expenses. The acquisition aims to enhance Onto Innovation's capabilities in the semiconductor metrology market.

Operationally, Onto Innovation reported a cash, cash equivalents, and marketable securities balance of $894.9 million as of June 28, 2025, an increase from $852.3 million at the end of the previous fiscal year. The company generated $149.9 million in cash from operating activities during the first half of the fiscal year, reflecting improved inventory management and higher cash collections. Employee headcount stood at approximately 1,589, indicating a stable workforce as the company continues to invest in its growth.

Looking ahead, Onto Innovation anticipates continued growth in the semiconductor market, driven by technological advancements and increased demand for process control equipment. However, the company also faces challenges, including export regulations affecting its ability to serve customers in China and potential impacts from ongoing trade tensions. The management remains focused on integrating the Semilab USA acquisition and optimizing its operations to enhance profitability and market position.