ONTO - Earnings call transcript Q1 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to the Onto Innovation First Quarter Earnings Release Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mike Sheaffer. Please go ahead, sir.

Michael Sheaffer

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

where the If of refer website, the have release, copy you not please to received the is posted. release a copy a of company's

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

expected of need regarding estimates, you implied the today and of information Act. I not on historical consist the are objectives, that future forward-looking judgment performance meaning facts, Securities Private of available best statements within whether Safe products, the at Litigation Harbor Reform always this and currently are As comments These the the to remind company's especially or company's plans, matters time. expressed regulations. Any forecast based

of a that be is believes to range these company wide reasonable. the assumptions Within

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

ahead release. Mike be a I GAAP call over Mike? found earnings to today's results and reminder, non-GAAP the between can reconciliation detailed a hand As will now go Plisinski. in and

Michael Plisinski

Commerce. exceeded the thank with our our announced any high license by afternoon. associated you U.S. without revenue applications of the and today, which end the of revenue call everyone, of pending we this $XXX.X our of range Department joining million, afternoon, guidance Good first quarter Earlier for approval

We midpoint and our raised revisions the which year-over-year of half year in the the our expect at the In well also second we from in XX% implied above total, the for positive the revenue commentary quarter. year to growth quarter, over XX% XXXX as represents half first prior even revenue last expectations second increase for stronger. and be these of

Our better results exciting strengthening demand the making markets, also progress to and market expand we outlook are our markets. served reflect in the our but core

customers a end in of to second manufacturer believe next-generation expansions the critical starting introduction favor we product creating begin additional selection customers. the new our the So these Innovation let's will optical layers optical X-nanometer begin This is which the increase interaction key We CD three geometries, cost for to through We of XD shipments an quarter Onto top with are our speeds, configurable platforms our the materials systems received for believe logic metrology than decision orders X-nanometer steps ramp Innovation's new Onto develop already quarter and line. complex to X-nanometer and of fourth more support node this larger need per transistor expect the extending in of intensity value shrinking for node step. was additional and process. carry the entrenched to second a back in partner that this see magnitude is X-ray. over Demand from for additional highlights add with We have ratio advanced performance platform and measurements half faster metrology interconnect the metrology select node. than our in capital through customer’s in first a proven the metrology by structures doubled the multiple nodes, At and at of by to our the incumbent systems below requests XXXX. latest for optical performance using factor

in we quarter, already booked expanding great After addition systems of million additional we've shipments with that year. of our existing for in quarter expanding and the tools shipping progress markets, to XXX opportunities second films in are fourth the to half planar this of including the an our this making seven first year orders expected follow-on planar third film second customer market. the In the in available estimated markets,

the with In in addition, specialty strong all of are which three by our expansions advances multiple placed high for well-documented and and and XXXX, AI. packaging markets, with XXXX. made performance half continue compute deliveries in in more second solution for thin XG Similar being the expected four customers experience growth orders advanced film further in drivers customers to

quarter, high As customers, advanced resulted last XX% an fourth critical guided The strong our see support compute quarter. process control. -- classification in devices from to systems incredible expansions AI we for quarter, incredibly a demand the which we growth in combination we the inspection we of saw our experienced XG packaging fourth performance pause the with offsetting was growth of over in packaging expected is proving integrated be majority in the where to nearly software memory

the actionable decisions devices we ability solution unique delivery the brings our accurate mission for steadfast simultaneously productivity, demonstrated not and only employing repeat to our of the leverage performance. year. a this a Similarly, market to quarter, where to automotive panel detecting, crucial our order lithography This but yield gain million for with production. AI Xx resolving lithography over impacting before for transform orders are algorithms order leading-edge quarter process faster intelligence more these expected quarter. excess $X of solution in to the fourth learning software million in improving while sophisticated in by additional backlog has in received control XX In machine has stepper proprietary process for optimize first migrated issues Our steadfast data to also critical into to streams from

from the making in our of addition markets, support image encouraged the a demand two repeat latest In ramp three CMOS by plan manufacturer we device several are specialty new top we quarter, device. of first in In strong the imaging the to to orders we're markets. their progress currently served sensor ahead received

this existing process. because seeing the more to advanced systems with critical demand unable associated were are detect defects We

a expect the only multiple For year -- new latest multiple product, significant we the well. potential shift already proven suppliers compound fully is newly orders top-tier into our of acquired business also which software also in metrology constrained be the integrated CIS solution in progress the growth overlay half year, and the the process, our overlay in Run-to-Run to CAGR the but optimizes customers improve lithography compound from value Likewise, proposition sale We've will not with released totaling market through productivity, XX% quarter. digits. semiconductor going to semi-customer second very in overlay has This already of first XXXX. the an projecting a double

over Now, discuss to the turn the to I'd like financial to highlights. call Steve Steve? first quarter

Steven Roth

afternoon, everyone. good and Mike, Thanks,

on As our Inspectrology call, book fourth we quarter our after closed I on acquisition the mentioned last closed.

were the first the quarter. result So numbers, our the quarter first -- overall includes the the is however, in quarter material amounts to not results of the include XXXX that

year-over-year above the As fourth the fourth from was $XXX.X XX% XXXX and of high-end up guidance, our up Mike quarter. mentioned, revenue X% million previous our quarter

previous which our revenue nodes advanced down more coming from the over logic, the doubled Looking were market market, with sales quarter. than by from XX% strength of

previous in strong the saw customers, flat NAND. growth devices essentially also offset Advanced XX% in We quarter. were but finally, and DRAM represented a packaging by the of but specialty a revenue with of overall weakening software was from services quarter, revenue that XX% and in represented quarter. the And

Our sales QX consistent fourth lines. from to volume the increase half over continue with coming gross established stay mix at product the strong impact margins XX% did quarter. of over with quarter the Product

synergies We expect improving that continued as value begin to from the our our cost. merger providing the supply margins to in we've impact new product implemented to customers, see our products, enhanced chain

First as of $XX.X to payroll Inspectrology occurred The was million year. $XX.X an expenses primarily reset operating at increase and the that of expenses operating the beginning the quarter of compensation due quarter. related were taxes operations million, the of expenses such fourth in increase

we to our in increase our model While our operating levels. long-term in increase an strong financial experience margins revenue within in expenses, well did operating these an operating XX%, for model resulted

tax was to effective quarter due quarter. the a in rate benefit tax for XX% the first discrete higher Our than anticipated

expect X% several other in rate to discrete also tax XX%. and reduce We between the tax to benefits second quarter the

be share. of now per due tax or a in somewhere closure per in was IRS from quarter income With net the XXXX high X% our the share of fourth range XX%. the The impacted QX end a above XX% of reduced the to of or was rate our effective net tax quarter, rates, benefit to quarter $X.XX QX guidance. $XX.X million $XX.X and the benefit year and full we income affect million, $X.XX and increased to mainly first reported audit. rate, we effective by earnings -- the low on In Fourth effective

basis, balance of and revenues ended QX, million. improving the million decreased DSOs quarter the strong Inspectrology in and free million and GAAP Moving to cash cash the for a of quarter $XXX a after collections, on $XX Accounts used better million $XXX which up with acquisition. higher we that's We $XX approximately of the million, receivable for from is XX% flow had on our or of position $XX at the cash sheet, quarter revenue. ended

Inspectrology's China an in finished turning inventory in the increase increase require purchases the to increased for guidance. systems and that in second quarter sales licenses. to quarter an higher the million and awaiting We're the inclusion shipment and now inventory, Our goods to volume XXX of forecasted

anticipated $XXX revenue $X.XX million. in share. to between revenue expect per in the be range is $XXX diluted to $X.XX of Earnings to per share million be and range this We

of operating $XXX to gross I'd benchmark be with We're place recruiting the back confident as call to revenue. $XX.X to the model we XX%. million. million continue turn growth we like that for our Mike active We an Mike? OpEx, increase anticipate -- Even seeing With between this in that, will be to our compensation are for and within increased in of QX margins currently plans and insight $XX.X variable long-term in strong next between also operating grow the range new into in also additional level we operating quarter be Operating are seeing. XX% within expect other XXXX. expenses expenses this toward expenses we million will and for

Michael Plisinski

second like approvals I leave the Steve. them would Commerce. over to in bookings out note that license to will the clarity. include guidance Steve provided of of the greater these pending of have the licensing from of you, that U.S. Department we until for future quarter uncertainty does Due timing are not we Thank million decisions, $XX discussions

broad-based. customers. Innovation These and valuable and data product problems drives explosion innovations. specialty Onto smart enabler at We providing increasing heterogeneous they strong growth point XG remote mine quarter, this So, from is of and enable packaging data both center and process becoming the the formations expansions cycle. transistor it then chip key customers that experiences. to each to come centers in adoption, challenging number from product virtuous advanced information. increasing consumer from information growth of that comprehensive to drives the work that The future generated volume cycle, leading connected strongest by this are clearly to second for center see being for data demand greater and higher XD are which compute metrology the value solutions demand semiconductor a the thus to mines of gold engines technology and a growth. project devices for to and virtuous digital device we packaging, creating support transform is and packaging sits high-performance data The life To XD into the in

the quarter hold and expanding revenue summary, such quarter. market. progress new CMOS and following our see surge we're the the to while films revenue In planar markets declines existing great steady, from expect increase for DRAM logic We image straight solid first making markets we the as fourth and a Xx sensing revenue to into within NAND growth

in end broader example, for see for to currently the channels, potential customers inspection certainly new specialty for for systems Each the products In The device website. want the synergies our have outlook simply for the of year the compound revenue our leveraging with the the Corporate to ESG many our both addition, want environment markets. these call realization our for overlay continued a next dedicated report It's I dedication inspection an to of expect and and of Onto channels impact also realize Onto customers' beginning stages success. existing we're of eight we're of and Report of attention on our through our initiatives Responsibility into on Thank is call to to to by sales positive semiconductor which exciting time be can to contribute XXXX. outside our their Innovation's XXXX, dynamics, positive synergies Likewise, by and markets. early a the our team thank XXXX optical beginning I for to local Innovation, part Connor, our Annual into employees. and entire revenue several metrology Social commitment First add our open we over available you. outlines And and now global communities, our questions. we to to suite

Operator

Securities. This from Riley will you. Instructions] we Ellis [Operator B will Thank question. our first with Craig come And take

Craig Ellis

guys, that's remarks came the an expect of expect strong third two your or following the for on first just one taking period up sometimes in you sequentially year-on-year talked second this you the encompassing past the the quarter. dynamics increase you've your even potentially with half you've on Mike, then And points second wanted characterized conclusion the to, half, execution half half on so quarters or look year, in and by year-on-year? that at if you second back of over quarter revenues done to of on And question. wondering was a like would first you Any in rise on And made about the for I to see, early growth to through in half. I question. start Thanks the first the which the congratulations quarter, in peak year. either magnitude you you things different color stronger

Michael Plisinski

remainder see So the we will right of now, sequentially revenues the believe year. throughout what we rise

we than be expect QX be expect to than we QX to and stronger So QX, QX. stronger

to is, So I mentioned but general that's in that new right where we're we're what not dynamics, seeing just into some to the the planar second and in like systems expansions the shipping we making now. that films, the in us, half. mentioned those for seeing quarter, begin additional market start adoption Contributing see markets also this quarter, earlier also backlog we're which there. revenue in in increasing second We've the lithography, impacting

time of our statement, us has the the second So confidence in in -- the strength that's we the -- -- improved so giving second yes, since what's half which in half. last spoke in the

Craig Ellis

as… far As

Michael Plisinski

Don't give that…

Craig Ellis

semiconductor okay. intra we to of software from and potential that in of then second broadening And to more I when to see looks understand that some first potentially try, as gain Yes, real increased you inter-segment market, described. the Had there. inside and ask year the a and basis on second to quarter-on-quarter question, some a on nice segments back just expect of of momentum the are for then my the customer traction any more environment Is demand Steve margin the to quarter-on-quarter color XX mix, has sequential that point services strong I'll in going the do in mix. segment dynamics things so, want gross quarter the just what the just to what quarter. a as of versus like good half grow leading that we should margins look -- with nice Mike gross And

Steven Roth

which there you it, -- growth I Yes. go but remarks, when -- back had that tool think that a QX, I the would we've we in did to gross quarter, is think you some we Yes, obviously had -- look give margin. could expanding the some newer again, say of incremental to about it We my was analyze at lines. of some talked to I add have when sets, products when I was existing people nice

of anticipating of So it with maybe stuff. with the for the didn't product some as kind some a lines have impacting margins, that revenue not newer incremental good was older as healthy have but

that sure, lithography that growth just We starting for are be to product that's do will QX I the tools the see talked -- in the mix. forward. about, ship forward, we'll that Mike you'll Going have in think

give margin pressure will So on increased able volumes. add a little little to lot it over take there of the bit and of a but again of that be a bit

and within So can I model, pretty we I'm think comfortable. offset stay our that but

comfortable look margin model And at ranges. pretty through we feel If million mean ranges, I $XXX of I continued up in going those that our you those these to ranges we're $XXX revenue marketing through tough, our growing beginning million. to you're think be in million, the [Indiscernible] talking $XXX

Craig Ellis

the much. in good. queue. thanks back Sounds Guys, hop very I'll

Operator

with This question. Ho We our next can come will Patrick take from Stifel.

Patrick Ho

Thank high existing you over on first from the and whether expansion seeing congrats the increased of provide of you little that from new outlook. expansion new they're applications, terms of you bit the wins in mix kind and your the term on nice Can term. kind the on wins discuss long performance guess and near opportunities quarter the side, versus right packaging. packaging advanced I whether you're Mike, capacity of you've on both off, some plans end? -- gotten of just heterogeneous a much, capacity you're of of is seeing mentioned color Can now, increased very you maybe computing of application coming some versus the upside customers

Michael Plisinski

processes, designs. split, them help of work even then would wins it's a these or into where new systems don't the them by It's I have year, some customers product the lot help installing develop were them XX advanced but new, of last to is months and It's yield so ago, them, growth we in call from more two. of but in develop what bit last, And I the quarter the little wins a exact a mix. not

a dollars, where to we're stack packaging, now in both say, or that for anecdotally the and few heterogeneous packaging panel see five bandwidth tried last a we've in more high put IDMs, highlight we've well with die packaging or starting fan-out within as in TSV. lot share as such sorry, the manufacturing that the what DRAM in heterogeneous let's -- to -- XD describe as advanced die, stacking lot into the the logic the growth about quarters, gains they're markets. driving as our And that's investors in XD advanced substrate, R&D, and more So the to memory together such

the devices a we're to we're of applied And expansions coming lot So seeing there. that. seeing more being

the So that to for for of also well. technology some instance they're foundry demand advanced through more our as growth packaging customers, and that's having running trajectory adding

Patrick Ho

And That's Great. for as follow-up helpful. Steve. maybe question my

that's impacting that how be ensure You now during higher environment. guys cash guess may was you constraints on by ecosystem? the your generated demand really deliver lot your flow inventory? management of Can to supply capital out and in your constraints able customers? the you're ability that's good right given quarter of And there in sharp working the also discuss, a And make to just the the some build to particularly I

Steven Roth

Yes. kind a that longer actually get little out, at. more our starting a we I we're but it transportation plans. on expand little working are side pulse to that, Thanks, here, cargo industry-wide see, keeping that chain. of pretty seeing than of Patrick. we're perspective vendor-time From looking to things bit, cargo, that mean, come stretch supply it's overall a especially on good ships we're and clearly into a little something it's We're the

the from some we that now, planning fact components, see stretching but with times longer right on a coming what doing, overseas. we're see obviously especially we're we for key So constraint supply don't

the the planning some we're growth those And seeing got with we're we've yes, So, we're accordingly. into plan. and built with working --

time. we expect So at don't that this

Patrick Ho

much you Thank congrats Great. again. and very

Michael Plisinski

Thanks, Patrick.

Operator

come Our will with Quinn next Company. Bolton question from Needham and

Quinn Bolton

traction. I'll also offer films Hey, start to wanted congratulations. Mike guys. my the on planar

how of about Can the XXXX, like $X a us seeing expect systems a to you significant customers. sort basis, Do number give just talked You -- much systems. perhaps planar of script, at you how is it this sounds or the to overall in multiple ship you're in the sense total films business? of multiple

Michael Plisinski

the I in think it's still stages. early

say, far as less than So significant, it's as XX% would of I than less XX%, revenue. certainly

other now XXXX. more adoption that's the the seeds by first right we're adoption encouraged us customer, following from for three going think rapid that then mean top customers, in that we're to the and we're seeing but all year I expansions also planting the with

for I significant the So, think seeing seeds of lot of growth future markets. a our of that a from it's us, growth. part stream. a planting We're right much for And become revenue we're see about we'll just then lot more all now

we films right reminder, films. films a $XXX the now. between market more common and said size, we're split it's Just going that critical the some some is overall in then after, million And common

So roughly so. or $XXX million

And another than hope so, little would can XX% going million. is $XX maybe achieve We that of a better XXXX. we that into

Quinn Bolton

additional the the then talked you growing for about you color. second Thank I the think And XX% Great. question release press is, quarter-on-quarter. the roughly in had inspection I business

it's back-end seeing feels like certainly So advanced the good momentum. packaging

Your in space about its growth talks the half versus half seen in main XXXX. is inspection of first that XX% XXXX first in of of the business sort competitor

But think terms the us you're competitor market, the keeping market market a Inspection overall of in of segment wondering your do in share? base. perhaps different largest So on if you share there pace your thoughts you position could time give with just

Michael Plisinski

it think on depends how you the market. segment I

extending we've all data China. got struggling in We're I leading times, plenty competition advantage So multiple think that is area, there. at is of. I edges. that's the that's an about we're taking think position of points that's the certainly our talked We've of And certainly

There also dynamic hand. company with non-U.S. second orders non-American work that's With option, the we suppliers option. the have tier amount is the an about we prefer many to of licenses, restrictions where non-U.S. we've have, talked has significant what of pending a in

care low that is taking the is there some So competition that. hanging fruit of

we're is -- the seeing the [ph] I department, think there communications believe dynamic. seeing what that a we're and that, the that's a what commerce Gnani that I from from temporary critical way several the not punish to the U.S. really. is decades, equipment work to over success and find of and so the which last growth a industry, semi overall desire to

turnaround. I where devices critical that's But the well. are happy markets and all And to think the so going we're in been at gaining we've as specialty and that, with how leading-edge we share

Quinn Bolton

you, Mike. Thank

Operator

will Securities. with And from Duley Steelhead David This we will take come our next question.

David Duley

Thanks question. for earlier taking to just you my made the I one Mike, Hello. want of clarify on. statements

Craig I think, it. also was about asking

year? You I of growth of mean how first than first the year think the versus year, up and mentioned this just Do the than first half me, half you half, be of XX% in first in second me half last the will mean the more first or half last versus up stronger the stronger calendar XX%, you understand was the do reference XX% what help would the excuse by the half year that second of be you up second growth made half. a than half? Or

Michael Plisinski

question. All a good right, that's

stronger that than half. revenue what in is the first meant be will the So I

half the half of first So we XXXX. see second than stronger as the

David Duley

rate And XX% grow of in Okay. you guess heard somewhere growing a the when business wafer XXXX. that? the equipment metrology business slower faster the kind companies than as around fab front-end far as that your I from market is calendar your -- think at Do -- wafer we've rate will and a you big or business, metrology look at

Michael Plisinski

I Let's see. if see can

I rate. think around we are growing that

new Certainly, which we're aspect, could activity home XX% we've next that faster of channel I some could right we, of our and accelerations about. the grow that's to on I is depends tool timing number drive could the seeing we're more impact metrology think right the talked and think the there some a not of change, in pull for year, XD to seeing opportunities now, in products in NAND, us adoptions now, that this that huge year reasonable. is but

David Duley

back volume this the XX% generally And big that, kind about investments will is for XX% the over And XX% seeing. of talked year. It's to continue equipment all to annual fab then, suspect I unit unit growth volume you growth we're business? me. growth. calendar of that your kind I Excuse would What wafer of be Okay. think given or expect end people

Michael Plisinski

top Well, the advanced, has driven we what can grew of by XX%, demand, on them. it's packaging. ends, levels. now and that going -- has you it's about, continue from they're making about, for advances about competing the TSMC our by strong, and think seeing IDMs migrating hear and different last at those we're products, has talked those kinds business a pretty advanced over are Back Samsung And lot our it's year, equipment of is nearly it for back-end it. but in talked Intel also of all talked to

see So decisions. that's want systems the actionable helping we that customers that defect just or our And to intelligence. transition They do isn't want to it. the propel fast of with also, And demand systems. we for we can see advanced this massive measure part data. advanced It's what do

right And high-end here advances the value can traditional the to part resonating very decade. and have more a that's they to well providing providing now away. semiconductor. with whole what So the adjustments of in make automotive we're process for industry And the that better proposition and is been

David Duley

you business. from lithography just Final more Okay. is, a elaborate question me could on little your bit

what I order mentioned talk think picked the you You is your you and and up is that $XX to that Could so tools those shipment than reason, the about million. speak the above that of now backlog greater all a wants sudden, your but a order has panel has changed in that of processes What panel sudden they're of development take ship lithography tools? IDMs, all everyone delivery big the to lithography tools? of starting of to

Michael Plisinski

is is -- announcing we've had capabilities the there orders Well, backlog is, and and there a is we be reason, and about driving that one is, we'll part as has features of new a systems. these thing some some talked customization. been There

in aspect panel, of volume earlier thing. could of XXXX, amount is another one the count That's we this that but what XXXX. but years just ramping of where that's XXXX, several moving, year see up into and So And talked the next we're just interest, tremendous and production about seeing not not capabilities through to we've opening production. doors volume that

compute So technology, the we're major every we're nearly, -- are large engines seeing type well, will packaging all high-performance technology. seeing panel -- this level this I of that toward moving

David Duley

which on mentioned this take Taiwan, follow kind $X foundry of roughly are the broad a they're a obviously this will of segment in raised which to but they've base we capacity their a times four As the more year? that, conference of bunch going CapEx customers three systems. months, customer of like largest billion. in like call, going bunch spend it in and XX% to sounds three systems budget did fan-out, they Do and a of our acquire the is you you back big calendar is matting or litho CapEx the to that end, The see on months on have

Michael Plisinski

panel investing side, and process say, the advanced customer from a their and leading, fan-out, not I for some From heavily they're info of other packaging certainly but know [Indiscernible]. more products. the those would you They're what demand gaining

David Duley

you. Thank

Michael Plisinski

Yes.

Operator

DA [Operator Tom Diffely question. will take with from Instructions] can come Davidson. next our We This

Tom Diffely

good Yes, afternoon.

right in those this China? that's a not process? that question the they were but been booked, Is million there bookings going -- Mike, to on in have $XX in inventory First, now, built are of shipped. Is

Michael Plisinski

We didn't up Some That's did delays. built in we the quarters. long such to expect in a and lot growth particular double have been didn't foresee inventory. of want

once. hit influx at having So a all whole

the customers now So, build. we -- manage working through we're some did to with build

it's that's the did so. full mention amount, million, not So $XX over I but

Tom Diffely

customers Okay. case reconfigured be work scenario? the could for those But

Michael Plisinski

payments case of upfront yes. And scenario, Worst also because the got we uncertainty.

-- So

Tom Diffely

Excuse Okay. me.

times customers? times changed Steve, your and tools talked challenges. your Have for about So all, you to supply lead going lead at

Steven Roth

this we're see new volumes the No, some -- commentary we've incoming, to just not our to only we're and Yes, se. think not of dates the we're on ramping but not seeing we're for really, times from stretching starting per shipping out I Tom. lead

Tom Diffely

your When Okay. what few might side software when and look mean more to you the That's finally, traditional services it the at the weighted that the is years, for look encouraging. growth services software And then projected at and margins? side next of you over heavily space.

Steven Roth

side and software. services is the more that, So, say the I probably of would some growth on

unlike most big if of the as area -- prior is a isn't steady as I going the progressive -- we merger consider to has it software growth, Software those overall to got days you recall, as always think kind isn't these [Indiscernible]. but

it clearly. it doesn't while as So, moves much that It the impact on the -- used to. move doesn't margins needle it's really, helpful

expect So, I I mean, to software grow. to continue

it a percentage think of point I the will to percentage continue the margins, impact margin. we're but overall on talking enhance

is think to the seen On growth grow. over and the the say, side, I half if service services steady back actually in you track some last a a continuing year we've service

We overall margin grow that this business continue is our expect to in And environment. a obviously to service business. pretty healthy

Tom Diffely

And Okay. products? products advanced services the is the then, packaging guess for nodes advanced to the business I leverage more finally

Steven Roth

Yes. of piece It is with bigger our advanced products more of business. the nodes

yes. So,

Tom Diffely

you. thank right, All

Operator

I like back turn to would call now to the Mike Sheaffer.

Michael Sheaffer

you. wrap We'd up. it call. you. and in That for to participating our for Innovation. the the please everyone interest your Thank like Thank Connor, for today thank Onto in call concludes remarks

Operator

conference. today's concludes This you. Thank you participation. for Thank your

disconnect. now may You

Onto Innovation (ONTO) 1 May 212021 Q1 Earnings call transcript