ONTO - Earnings call transcript Q1 2020

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Operator

Good afternoon, ladies and gentlemen, and welcome to the Onto Innovation First Quarter Earnings Conference Call. At this time, all participants are on a listen-only mode. Later, there will be a question-and-answer session. [Operator Instructions] Thank you.

I would like to turn the conference over to your speakers today, Mr. Sheaffer. Michael sir. ahead, go Please

Michael Sheaffer

you, Angela, its shortly Onto issued afternoon the and first quarter good XXXX afternoon closed. everyone. financial market Innovation Thank results after this

please a If not copy of posted. at copy refer is a to release of www.ontoinnovation.com, you where the received the have the website Company's release,

Chief today the Joining Plisinski, Executive Officer. us call on Officer; Financial Chief Michael are and Steven Roth,

forward-looking historical case, the today Company's performance estimates, Private Securities whether the always forecasts best time. judgment I statements particularly not safe available that regulations, is remind made Litigation Such objectives, of implied, need of or the currently XXXX. As being you at are consist regarding matters this of within harbor the expressed based any are meaning plans, the Company's Reform facts, and comments to of future the on expected Act information and

Within these to range believes wide reasonable. assumptions Company the of that are a be

found financial reconciliation release. forward-looking be results our and specified. A a disclaims of are Form any otherwise Innovation's expressly must well be and report December vary do between in the non-GAAP will it Innovation However, these Onto for actual does Today's Company today's Risk financial results XXXX GAAP non-GAAP guarantee future currently factors cautions other on as impact a ended cause in statements materially. discussion filings statements unless described performance. as to recognized year uncertainties not may that obligation to Thus, of with Onto be that detailed are these Innovation statements earnings that the can no the are can results update basis subject Onto range that the of SEC. so. XX-K presented to results

the to turn over Plisinski. I call and Mike Mike? ahead will go

Michael Plisinski

financial our business. Mike. the and first cover with Then call earnings on you, outlook on its first for I'll review an Steve's the COVID-XX update and and Innovation second welcome Onto quarter, the quarter finally highlights afternoon to begin impact Good everyone our by quarter. Thank call. our I'll followed for

So, let's begin.

in increasingly our our At Wuhan implemented the safety with Onto with policies more we've China. COVID-XX virus the and in comprehensive that impact Since January suppliers to time, on for Innovation, business. lockdowns the staff of our reduce battle started

As a safe customer we staff commitments our and the result these of quarter. proactive steps, met our global in kept

revenue with and their disruptions we with In pulled the in addition, systems In expedited XX% roughly impacting from the rent chain which a These at our we reported the $X total, in future ended second supply prior at quarter. forward few quarter concerned represented over plans. guidance customers of of high-end range revenue, nearly were was growth $XXX the million quarter. systems, million the request

for half Over resulting of our metrology growth revenue of capital applications metrology quarter, inspection the also digits top systems. X in for industry control XG quarterly Demand by growth spenders the X and came in lifting double surged both our over Atlas revenue from prior our in for quarter. digit the solutions process double and metal

we to million over the expect strong of million integration our another demand while tasks. implemented by integration annualized to quarter. In with we we cost for addition the products, by $XX the to the synergies, also third expect annualized end COVID In year realized challenges supporting $X end which pandemic, of fully this we accelerated overcoming April, posed synergies. be our in total, In

X.X for XX per of at total $XX.XX million of in a advantage sheet our price to an of also million of million XX purchase We first strong quarter, and balance back stock an the share. April shares took in average additional

leave cycles our sheet proven debt of ahead. the cash balance us confident lie the challenges, that no ready through healthy importantly, of take most and to opportunities to navigate advantage with will Our through ability sea generate

first color quarter some on provide I'll results. Now, our

be As we'll our in a reminder, results reporting three categories.

DRAM, The which is NAND logic and for first of advanced comprises including category front-end foundry. sales semiconductor nodes,

specialty the silicon products includes is and The software is our advanced manufacturing packaging, category second for And which devices way and third category also nascent our services. market. in

we'll quarterly of from XXXX clarity, For be adjusting former October changes included based QX revenue the on in that the all pre-merger Nanometrics. reporting of results the

our edge the Revenue metrology. begin the X Revenue manufacturers from XX% from logic advanced originated driven underscoring customers and Atlas growing systems footprint NAND Innovation's metrology to let's primarily for applications the XD and of the new integrated with at notes. DRAM and OCD, facility leading design DRAM nanometer DRAM a below nodes manufacturer a platform. memory, and advanced applications grew by leading quarter, So, sequentially, notes at ramp for Onto metrology nanometer rules. design in of XX metal suite Atlas and Leading growth our selected

measure XX broadband globe. our structures most sub layers these the every volume metrology winning exclusive and provides on factory of based Atlas our required the is most model data performance of have productivity to selected The broadband the around nanometer To-date, critical exceed that platform systems selections designed to to Atlas structures the The been levels complicated our integration requirements for manufacturing. comprehensive with reflectometer. complex the ellipsometry augmented the at high instruments these two

enables teams technology and this X production data multiple below. nanometer in R&D developing most customers It's at as productivity and engage with that continuing structures we combination leadership as the measure we advanced see to richness processes We today. of our

across to systems value. our merger to our inherent of the technology process Company learning creates richness machine data increase time opportunities leveraging to and further Our leadership extend rapidly from by and algorithms the

high smaller by and these devices performing XD bandwidth for was manufacturers trend high Onto specialty ecosystem products the specialty all logic high into to advanced exciting technologies and Also factors. integrate for to are segments transition filtering. speed devices the packaging secular advanced are and Innovation to power critical NAND XG to form the from required These packaging of an our device communications. of bandwidth another Driving ecosystem enabled

providing in this in resulted Onto control grew across Innovation the Discover The XX% for our surgeon gains through in solutions silicon some orders Dragonfly FTIR we which the manufacturers. a Offsetting combination primarily well wafer fourth of this and ecosystem inspection from unique saw by After declines process systems. these slowdown value inspection composition quarter, products, our was materials business, strong software technologies. our is of NovusEdge quarter. a as as

caught into the continues spenders. After quarter, order investment. the from panel the to customer quarter the this our This Wrapping a until from customer conditional lithography specialty planned in customer installations seventh of packaging up fourth We of in next semiconductor EUV the segment, in impact get COVID-XX is see attract up pandemic. pause we advanced continuing and received the first delivering a panel second five tool to quarter. an existing panel capital top the new to

technology to XXXX. to stages ramping we potential be part Like others, their tool a still applications first expand. ranging from see as panel packaging continuing IDMs OSATs and in level in roadmap. expect they the customers This the year will key of half to seven in packaging top volumes for see level the early we The of tier next delivered panel packaging with see now progressive market is

regards with our in to partner we've productively our relationship Gen our display terminated China. With X program lithography, for

team termination been with intend our The work. positive projects customers the the of slowly in they reengage reaction returned China. to transferring them to has talent Onto on top part As we and Innovation we're from the as lithography directly to

our including were of to early the support located and were directly quarter, the out combined Wuhan able locations safety an leveraging January. By team Rounding the level capabilities, while of newly we did of the preserving the globe, our uncertainty other managing through services high staff by pandemic maintain our job outstanding team as our in pandemic. the a impacted around that as

our over growth pandemic quarter, increase a revenue drive organization merger-related record ability customers level service accelerated has value-added fact, will to additional initiatives, our enhance of for through The of cross-training which services. the and In much and diagnostic XX% previous our serve recorded of need an further the quarter.

the the Steve? financial a Now, I'd quarter. Steve like to to turn review of results over for for call

Steven Roth

Thanks Mike.

noted, the as Also, merged will no quarter full the results on of that first longer results financial remarks is the And this my compensation. present stock-based finance excludes begin I basis non-GAAP the of new are Before noted. the company the of Mike presentation except where merged be here non-GAAP company.

In the the may partial for I the Rudolph but operations those difficult, you. financial results are represented somewhat comparability of on fourth closing fourth the results October quarter, for that since recognize bridge Nanometrics of try to and the this differences full the quarter, period only our results former XX. I'll merger

of mentioned, the As our first Mike above million revenue guidance. was $XXX.X quarter midpoint our

deferred at our excluded we For $X.X Nanometrics' revenue revenue the been of the reported the have October shipments would XX of closed $XXX.X beginning fourth which results quarter of merger and quarter. the million XXXX, of million, at that if had million in we

combined quarter XX% mainly X% over advanced the revenue, market, Based million. represent QX have fourth accounted revenue results numbers, the on a been our adjusted full of quarter. down of by from company prior approximately the in the increase Therefore, would revenue Breaking nodes those for $XXX.X memory. strength

of Specialty devices from of and and capital advanced quarter, greater customers sales. top in our represent of revenue a revenue, services five We for than proven software the remaining that business. the spenders came and two XX% both had packaging XX% customers accounted XX%

over is XXX the the broad one from silicon manufacturing customers discussed, all of way wafer we've with and diverse the As of to the base customers. company manufacturers advanced customer benefits merged

strength margin, quarter. Turning lower quarter, gross margins first Dragonfly in XX%, also product Atlas margin III compares XXXX reported quarter the lines. by first the in fourth was This in gross driven to and the inventory margin reserves XX% to gross both impacting with

currently As of primary we the gross driver product to the we to XX%. anticipate XX% continue in of as look margins QX, range mix to margin to keep and forward be

move the synergies. our operating on to update onto progress about I a Before with provide I expenses, wanted an discussion merger

of we and corporate we be we As in million by additional in streamlining, target, around by million cost end business eliminating end XXXX. removed $XX.X synergies exceeded on Those the could duplicative targeted company identified with public $XX a have supply To-date, execute synergies that now reminder, rationalization, the in of synergies implementing the year. to costs. synergies primarily an overheads that believe chain were million we $X.X

expenses. move Now, operating to let's

and reduced fourth we reported impact were I a of closing. Nanometrics result expenses, results operating operating COVID-XX those the mentioned the million expenses First low the end the The lower expenses the fourth of lower for The spending expense. quarter in million synergies just to million and a overall excluded $X.X travel as were drivers quarter, of from primary prior operating $XX.X XXXX $XX.X expenses quarter guidance. at

call, every year. QX our to from As last operating I stated historically QX increased quarter-over-quarter on expenses

for the quarter grants, our bonus During the and and taxes perform reset first year. equity we compensation reviews all plans payroll annual

offset of expect accelerated savings our the a to second we the full implemented for synergies see operating synergies synergies QX impact However, the quarter, and and partial operating cost impact we increases. those in expense of the beginning QX. the implemented synergies In of

to operating of expenses currently operating the Our quarterly. QX be our million the two about companies range expenses in XX.X was forecasting XX million, historically the combined of to XX.X companies,

So, $X we synergies million of next quarter. see approximately merger already can the benefits the

share $X.XX income $X.XX million merger shares, used the would or $X.XX per however, our share XX.X in share the quarter XX for was In million Net calculation was in reported shares quarter. fourth first the middle end million per about and the we the share of count higher at In the net count that quarter, XX.X through closed being of in and fourth guidance. the share. first that quarter was XXXX, using income quarter result share; approximately the the count, outstanding per

which million. on investments cash ended we basis, GAAP of Now and a turning are to with and XXX the a position quarter cash cash

previously Mike totaling XX.X program the repurchase million X.X million on under our authorized During shares. stock quarter we as the executed mentioned, of repurchase of

We in the X.X in the reduced the quarter; cash significantly quarter. from amount million also timing generate however, by was of that operations in shipments

of month our due quarterly moving generating resulted and to chain operation cash Nanometrics within portion shipments our in quarter out ability the a and our Slowdown the flow COVID-XX majority and even in a both of to combined split were companies the supply going a of to stronger. quarter. Rudolph were collect Historically, sales affected last our strong

is model quarterly That on million between structure. currently be depending and product cash expense revenue breakeven XX mix. million our We to XX on based current and also our

our and R&D and opportunities position other a are we're confident generate from roadmaps revenue materialize our we to to strong So, that and cash position cash, innovations. with as they to navigate maintain the ability invest our through current ability our our in in challenges

Now, Mike? back I'd over like to turn the to call Mike.

Michael Plisinski

of quantify, pandemic The level of that Steve. in occurrence you, the difficult outbreak impact an chance Thank impact its is of to new and operations. the both to uncertainty of adds

earlier, mentioned the share to to staff best risk. safety the protocols business. working suppliers to maintain reduce have implemented closely their with I of As to risk a Likewise, practices our reduce variety very we our developed we've our we're of and

We to of throughout protocols restrictions. these the independent government intend maintain eventual quarter loosening the of

Our impacted our be to a in factories suppliers unexpected, function. negatively deliveries, guidance result, an and miss prove effective, prevent our could will to our fail unexpectedly as assumes these we steps range. contain continue or our guidance to will Obviously, operations our outbreak if procedures or one of beyond continue then

analysts to March, for benefit in rose Much reported what investments we first see that shipments markets XG. smartphone discuss Chinese demand. Asia in we like the In So, from continuing quarter, million month. Apple let's and March, the increasing month. percent in the improved XXX% XX expected down over more up units but China than prior year-over-year, over XX% see prior smartphones significantly to XXX% in year-over-year

Looking of new the of the supported phone sold March launches beyond Qualcomm and XG. March XX% that were enabled, China, XG in XX% phones reported in recently

demand So, coming handset Asian initial Chinese from other and is XG most of product manufacturers. this

customers these are mentioned support. As ecosystem earlier, manufacturers, of we global by supported a which

to our growth strong will inspection another the ecosystem contribute platforms. position quarter double-digit believe of We for XG across sequential our

see remained the the more of plans we at expectations the nodes, spending advanced For cautious Those versus secular year. trends strong. start

the how quarters current several the impact to will versus COVID ascertaining are how as from demand real and we Our demand begin inventory growth, next is builds customers emerge crises. much

quarter, DRAM see also a investments NAND process in stable. with ramp see the We after customer So, spending spending which DRAM aggressive second Asia, decline logic the control a first surge relatively the a quarter. included remaining we in of in declining in

customers. nodes expect in we between and advanced logic, range see and fourth the to from first DRAM summary, with In NAND demand revenue quarters from the balanced

a with million, X% approximately of operations be risk a the to advanced So, from continued X%, mentioned and XG greater uncertainty reflecting in revenue but nodes, growth the growth and still to in maintain quarter and of as the we estimate pause from earlier. assuming upside market suppliers, second downside $XXX with we

flat, After forecasted guidance of our polling in to sequentially. approximately of second second adjusting to year-over-year worth first from noting that for are $X half an It's at the the aggregate X.X%, be million million the first we is the up quarter adjusted quarter, essentially basis. comparison $XXX on pro forma

earnings only the expect in share, range the we've of synergies $X.XX We to from benefiting integration per partially implemented. $X.XX

applied. can businesses this a potential and the track role to important is pandemic and the of are targeted work-from-home schools the to smartphones world operate the economy, help wearables Technology continue in recognize such playing environment. devastating be enabling policies virus, global As devices to the it's containment fight more pandemic on Mobile so used spread in economies. as to and of impact being against encouraging is is on the many technology its

compute are data massive silicon treatments collected development the More of being how we macro in is leveraging work, to from X.X our aspect nanometer XXX XD eventual of enhancing healthcare broadly, and device packaging globe of and engines around every we layer the technologies drive, shop expect enabling systems. the to nearly and are what content High lives speed volumes and X semiconductor communicate, trends. performance technology vaccines. processors DRAM from from Advances these

quarter, sub level process We're of golden complexity nodes XX technology is the across leading where manometer innovators. control, edge Innovation devices spectrum in a leaders our in in era reflected As broadly of the Onto of and the control final sophisticated denser demand die more for is increasing creating devices. process across demands from more This is for complex to heterogeneous value with chain bare semiconductor solutions package packages the interconnects. simultaneously wafers

use to We'll team our model is positions growing as devices Innovation advanced and edge are node sheet demand for all Onto continue The we in on financial specialty depending provide. packaging. and to design are the technologies to well-positioned with balance customers and which that fuel such disciplined meeting strong XG innovation our leading

questions open we'll that, the lines Angela? with our covering analysts. And for from

Operator

[Operator our Please go first from Quinn Instructions] the with of Bolton is line question And Needham. ahead.

Quinn Bolton

a said a the nodes the quarter in like you XX% Hey follow environment. results and DRAM, growth was foundry first I the sounds guys. start advanced specifically with the Thanks Atlas. if by mostly have It have wanted off challenging on a wondering up? to you also saw driven then but strength

Steven Roth

Steven it's Quinn, Roth. Hi,

strong quarter. very the in strong we DRAM fairly we So, growth in quarter overall, foundry had yes, had also a fourth the but

was flat would in an I the very wasn't over it both still it overall there quarter, good while increase say, over but was quarter was of I quarter, quarters. over mean, it portion quarter So business

Quinn Bolton

off base So a QX. flat pretty high in

Michael Plisinski

Yes.

Quinn Bolton

Department end then, use you tightening Commerce the controls military second users around the export China. mention didn't guys And question a military actions, and in

past to end the over the might get had require whether on that a to wondering to that the have of Thank new Just and at licenses business ship look new any those it June effective if regulations come customers at you. week, will to chance you've you China? in specifically, impact

Michael Plisinski

been Yes, course of D.C. our working under as there. Washington, in well council play of with some here and the to We fall own do understand council dynamics so those in as restrictions. try we've

level the Our products -- there. impact a there's are uncertainty lot is of impacted, but still of

the that expect we're or better within next and trying week a still would to to So, have through we work so. understanding

Quinn Bolton

fall required you to on license interpretation? you a be that? if means Do think Can under get just that under, follow-up you may I then that

Michael Plisinski

a in may device, customer or military. license or or to toy chip may memory if the not other, selling memory used the be you is actually chip make there's the a a Either in military

that that well? making have and these to customers for option building devices understand consumer So, an certify the is we they're can as

Quinn Bolton

Great. Mike. Thank you,

Michael Plisinski

It's totally at really this clear point. not

Quinn Bolton

Okay, thank you.

Operator

And with you Patrick line Please is sir. question next of Stifel. ahead, from Ho the go

Patrick Ho

everyone balancing how March how impact margin much how or and quarter. much gross well. strong for you margin Steve, to an impact much Maybe have And cause I very hear given a the an Maybe in you during of occurred June perspective, to Mike the profile, did quarter? lot on disruptions Thank the Or is issue you from the that of of that line much the have the quarter? the COVID-XX that in gross was it of do? it'll glad terms think pretty just guess

Steven Roth

it's Steve. Patrick, Hi,

can in we stepped up and the prepared see much, place processes you we to split as like remarks, So, in able team the like things and really our were put pretty in and that. things shifts

just couple to able So, that mix before was happened. of what product mentioned requested. a orders planned, we kind on all customer continue to existing of we had pulled the we execute The in had. Mike were we that this tools maybe

costs a affecting the for Obviously, the the environment. I little from been would were So, the the guys service the of expect say in line reduced slow all price, really down of line. quarter. from to gross the above perspective costs is a a have obviously margin similar we that towards travel the what would bit stuff normal end maybe things of and from coming tool, stuff was everything Most prices

that these place in and put doing obviously, But tools you're we the people trying field to -- still without to travel. are have we obviously got lot a of in that get

our installations doing we're are those the countries which in there. So, at

where really don't no on why was of very kind minimal really effect that's we are. really there under sitting effect, QX, and impacting say, operating QX the we're would mobile in that and I So,

Patrick Ho

for on the a Great, I've inventory their helpful the is and customers level in at your food inventory maybe terms some uncertainty obviously that building given there. heard are inventory, Steve. and some And as your that's building end, end chain the entire things user levels, that's buffer really follow-up of customers you out

relatively healthy. levels inventory look Your

the given uncertainty in ensuring supplies you'll So, for the you and necessary inventory can about this how talk the very disruptive environment, marketplace? have you're that

Steven Roth

material. right Yes, build the is mean, we're thing up we delivery obviously, I cycles. of have mean, decent so, one there the up looking there, fairly with it's I obviously number obviously at

we of your there ordered to much have delivery disrupted earlier getting we've Malaysia from things in the of we've advance couple for well out So, where the this dates in been get commitments monitoring. QX, been we still obviously there's but that stuff got We've things places of and would monitored especially while material. pretty our that couple time been we're quarter, a a suppliers

happen it's out. coming risk would can So, the to you but I because see that say make of standpoint, hit on now impact right in we can a course, the next. from we sure don't QX But given a what seeing, stuff we're the numbers were know

Operator

Please the line your question with D.A. go Davidson. Tom of from And Diffely next is ahead.

Franco Granda

Fraco view actually was semiconductor on is I on the for for your units to This year. today. Tom hoping get

obviously about for in unit to if year XG would but kind be half, growth You entire the enough growth that talked first of down? the driving drive slowed impact

Michael Plisinski

we're there's of data centers. cloud think also refresh based people engagement seeing. that demands, combination. and not home start in just of to and up lot tools start as that more of social a there XG, to sort drive a work cycles adjust lot is And I are data to this people environment, media remote from the a but It's PC center

of much two quarters, next will will quarters. to demand resolved be versus over So, several and the as consumers continue the how start the how in really, back been hopefully accumulating has second is come next much question the

moving forward technology maybe out. ramps, or out asked, investing very and confident short their there And also I which but a the next here with you think part note ramps. our I far, demand all in being lot think on push ramp that side, of only, -- the so on one of which to They've so a been their are thing important in that's it's pushed customers of

industry perspective. a from also that's positive So, the

Franco Granda

Okay.

that? that with X helpful. Thank terminated question the your of on will do then you. timing partner. China of out one we for Gen you expect relationship the that's change Now, the And roll tool, your How sort

Michael Plisinski

had let's Well, the technical say engagement we've was and the the all customer customer a and for we milestones know, milestone next in big tool. you that that locking as targeted, achieved

having the was progress. partner, So, we with inhibiting our struggles that were sort of

the re-engaging. now the customers the who process you and there. of restrictions, customers travel meeting But at least there's zones of a aren't of or we're in as a one know, lot of So, people couple that hot

we more more So, that, get are for accounts we'll But and they've projects positive there clarity the are very direct tool. feedback. the reengage gotten as have looking that we from been encouraged been X we've has Gen at and feedback that

Operator

And your next question is from the line FBR. of Craig go Please Ellis with B. ahead. Riley

Unidentified Analyst

this that guys, synergy to identified Hey synergies Craig. the taking [ph] question. for on with. I great for the guess on and job Thanks some is Obviously beyond Carlin started Lynch my I one start want you additional there had front. you

As you do a of out back 'XX? even kind this half of... just Or harvesting high further of calendar as you you level farther, look see of is kind year into perspective, the kind and look synergy from maybe the

Michael Plisinski

that see, rationalization we synergies product are in of we and the ability execute see we chain additional to the rationalization on. more some think that I supply the see the

those projects coming will that, I we investing processes through. in we'll wouldn't ongoing more together. business that say So, of and then bring sort those be that be are

there. software are some e-diagnostics are a to few more identifying. we're revenue and mentioned value-added services help we're service that and add as the of more the improve them there also employing the to There So, I synergies. synergies that organization of

we're in we more that uncovering XXXX. more there's think expect and I So,

Unidentified Analyst

it. Got it. Got

that is unclear talked do guess revenue up still just But generally, linearity, right now kind we growth situation whole half with in travel half on Okay. restrictions. the And point? which air COVID-XX drive pretty you the this start obviously, of pretty is the kind if those through year, kind half on then synergies to think you about half and some of of that could at get of or about, I

Michael Plisinski

synergies for half growth. drive early on revenue half it's the think I revenue to

But as half see able the following growing would the over execute to it half some enough continue into revenue, but small, half, that far discussed, we and as half to relatively to very year. we think over I and will customer might drive they've be demand still if plans the be to see customers building then growth.

that shaped to I a as U is think everybody of trying that's, far, a lot curve, what L we're the it recession And is pandemic. impact that's but of a there's seeing. certainty yes, and so or global understand

Unidentified Analyst

of the clear, demand be back of you disruption year? half in to seen any signs just haven't the guys early So like

Michael Plisinski

We some was have, peers growth, but We like was the growth, that some did and that much some this out still this. didn't have but reduction XX% see had And forecasted. seen growth growth. year coming that of see We we growth. things we

you guidance over can or our first guidance So the our XXXX and see is even of half at QX midpoint is at still X.X% the level.

we do driving if if execute, demand, to continue we we in the see customers So the potentially additional growth the half. second

Operator

go from ahead. is [Operator David Duley the please Steelhead, your question with of next Instructions] And line

David Duley

a to help whatever products? the your current over the understand times extend for me. Could are you last product times Atlas have and quarter? lead lead us questions those And or you seen or inspection from couple of Yes, what contract they done the

Michael Plisinski

had way supply through some the discipline configurations move have customers with drive that to we would is in that specific dramatically. to the vendors the chain options worked far but they or the the dramatically. the as they We've with. work the get more that more around, the about, we had we The haven't orders have can't to much customers the cooperate things make have haven't we've all tried What we react so past. to supply issues parts and unique -- be through some a and different can't the inventory those issues that do we've that care changed lead sure sooner, times specific in in chain can way with as it little carry lead changed so times But were overall, and

So, maintaining how been more maintaining, the less we've dealing or that's times. with, lead

David Duley

And roughly what weeks? are they How many then?

Michael Plisinski

X I months. X between anywhere would say X XX and to

David Duley

everything what write talked help win you from the win everything that bit why share did on you more about sorry. little would quite mentioned us understand. elaborate the you I'm could and why with down that market Did And right, were associated you DRAM And about? didn't when perhaps products didn't hear somebody? you take a business? I

Michael Plisinski

On if integrated line, the the but can't as or We We account. had of of the of products this our we of MetaPULSE well. I by the were the not. Atlas product pleased extra the gained and just adoption product our DRAM a position the also side, share within capability across we've because the tools. not speak business line magnitude won metrology

I see didn't we what And yes, say share had of to and whether achieved or gain may the the we're gotten. measure for our achieve. to hard the I So with level or we competitors for it's products of sure, not. so what adoption we we get customer But technologies. pleased expected a know have

David Duley

could June if for expect business, in going the talk segments thing final do then And semiconductor me, each quarter quarter you I into the just to you you you end front and what the would think just and it second segment mentioned talk the about about why? could

Michael Plisinski

fourth the the mentioned levels between second first would between the the and the So, advanced be nodes we quarters. first of and

delaying some So, after the declining of bit and in some are pushing out as or a little rebalance. customers growth QX some as expansions

logic, continuing business. and see DRAM advanced specialty balance primarily packaging, growth driving we from between NAND and So the And inspection equally. almost the XG for

at software relatively high levels. these what that's services And flat the remain So, levels, see. then that's near where we record and

David Duley

this sort given more you flattish? on commentary, early all just considering can but revenues based know your it's backlog QX Sorry, that your there. scenarios Or I it on, at in and of would what now? you put one at expect I seems be the of point cards are to look kind you like to want

Michael Plisinski

relatively plans, -- of if to supply their us. of up, uncertainty with the process a of but suppliers what's looking looking uncertainty the that chain understand not QX tools, COVID they impact if customers QX, all to equipment a continue deliver. to can if pandemic, the -- on they can We impacts understand just should are build but lot there's Customers now. there's a be so lot strong, right of are flat but relatively

Now, process need additional there's for control. no

a they doing now, working uncertainty they're QX. think about there's lot through So, right as for customers of what that are

Operator

is And ahead. Benchmark. Please Mark from with line of your final Miller question the go

Mark Miller

virus to computers your interpretation a be that that in speculating and of purchases quarter the One the to the kind of and was impression up. try decline there because want that of of spiked get could that lot of the you're laptop was logic? Just DRAM during

that is were do either those stockpiling to are believe? or concern another slowdown have the people theories work internal interpretation, chips, which you Another

Michael Plisinski

trying Well, customers that's ascertain. what to the are

not commentary from heard we've that So, customers they're sure.

They're not publicly. the they're I actually TSMC versus much how said demand. sure is built demand think of up seeing sustainable this

got built versus DRAM think you've where up to of the months advanced So, inventories not, I or take memory And situation similar then on I few a side, that'll expanding. data play out. centers think and a it's

supply I constrained, some think to we've couldn't seen some were but more they they of data chain equipment. from the that wanted because receiving service larger and of commentary center providers they spend capital

demand not strong seeing pretty inventory there's we're that an implies out that that there problem. still, So, and

think, plays competing two and see out. a different views I months that how So really there's to we there's few need

way. For either us, prepared for we're

we I at this As have things synergy, bottom line. accelerated if so mentioned, prepared some healthy we're level to stay

our able within continue time, ramp and to can accelerate the continue prepared to we the returns. manufacturing demand the invest, organization we're to So, at to same roadmaps, be when

Operator

I'm now questions Sheaffer would this the I to no for remarks. closing Michael turn showing time. at back to like conference further And

Michael Sheaffer

dedicated our Angela, and to that Innovation for Onto And and their the overcoming completes thank many you for your for I customers challenges support, to thank a also call. support our Thank these challenging our this you, times. during cooperation suppliers Angela, team special thank and quarter, in want and all you

Operator

conference wonderful this today's your gentlemen, for concludes you call. Thank a participation having and day. and Ladies

may You all disconnect.

Onto Innovation (ONTO) 6 May 202020 Q1 Earnings call transcript