ONTO - Earnings call transcript Q1 2024

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, Investor Relations. Please go ahead.

Michael Sheaffer

Thank you, Rachel, 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 did release, copy you not please to receive the is posted. release a copy a of company's

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

a remind the the will to statements to statements within of federal forward-looking are contain laws. range the by statements management like and can I'd of risks made you that meaning securities Those to call uncertainties on actual cause changes, this vary subject that materially. results

more encourage that may you For and impact would our risk review filings. I release earnings results, regarding information to our the Onto factors SEC Innovation's

update new our a light these forward-looking does specified. Innovation presented will unless Onto statements otherwise information discussion of future to of events. financial Today's results financial basis on be not undertake non-GAAP obligation or in the

today's be reminder, and in GAAP a detailed found between As a reconciliation results earnings non-GAAP can release.

ahead go call CEO, Plisinski. and the now I'll our Mike? over Mike to turn

Michael Plisinski

in at resulted end Thanks, first and logic for a call guidance earnings packaging our memory and increase thank AI to gross within period for afternoon. everyone, XX% of second Strong for our Mark devices Mike. range, joining this anticipated revenue and over high came you of quarter outline, the and demand half we Good expect the afternoon, very margin high-bandwidth in further year in will improve Margins ago. the same the guidance, quarter soon and year. as next

our consecutive revenue ago. period growth systems quarter, the and for jumped to advanced over increase prior almost XX% highlights, quarter the record, for devices. exclusively delivered specialty a begins, XX% packaging Dragonfly quarter, In same packaging our the we'll AI solid support we Mark Before review first revenue year capacity with first now customers the the a quarterly where third over starting

to demand critical address new volume, defects. to and also to increase we addition In project emerging

breakage. wafers as that to being of micro for cracks, are embedded the needs, are platform silicon, enhanced microns. to our detect making in from high-bandwidth packaging, used Responding several shipments the stacked a as our subsurface maybe memory to thin to with wafers production starting example, XXX may are quarter. Dragonfly through Logic propagate to new prone the small has with capable customers' orders ultrathin susceptible For XX then formation in more X.XD which the been defects These and at customers it second speeds sensor

declined from XXXX, the customers in first a in at existing we to quarter, continue manufacturers our device year After and record but power customers. new revenue expand footprint add

to in of half growth carrying We the the yield without expect demand the through increasing the is see increase this to to to quarter improve year. starts. output return factory and of number the wafer of Much second second

quarter roughly Now represented turning advanced Orders but as and expected, OCD Iris planar included revenue growth remains and customers films. incrementally was at largest devices to logic the the the levels. both our advanced nodes nodes low and support improve advanced business. to half the Revenue in from quite of did Atlas

Now to I'll and highlights our over turn second quarter the the Mark to call review guidance. financial

Mark Slicer

everyone. good and Mike, afternoon, Thanks,

revenue of we generated and Before $XX and operating first get details, revenue. highlighted, into guidance, high our flow of achieved Mike end XX% the million, I we at representing as quarter of EPS strong the cash

up X% of prior up the quarter million $XXX versus and fourth was versus First quarter revenue year. the XX%

system to XX% AI packaging the prior of up XX% to Dragonfly $X.XX quarter devices. the of advanced range sequentially Both the high to end and versus strength our our First EPS revenue guidance the year. due EPS demand at compute and of support increased continued for is

XX% nodes, represents over QX over which quarterly devices slightly of the by XX% up revenue. at and million, revenue. advanced represents million of advanced of revenue with increased markets, QX $XXX packaging revenue and quarterly $XX XX% Looking revenue had Specialty of

Software We achieved and of gross our revenue services X% first XX% in to for margin XX% over representing the with quarter, revenue. with of of line increased QX, XX% guidance while $XX range XX%. million

tools First operating $XX differentiation applications and range above emerging litho extending million, glass our for additional panel Mike as made control quarter guidance the like and were mentioned fast investments that quarter, our process engineering within the product panels. as emerging wafer as in applications well ultrathin for expenses packaging technology we the process inspection and

XX% for to Our operating the income from quarter. of $XX XX% quarter fourth revenue first of compared the was million

from performance higher favorable was the operating came income net while expenses balance, cash higher of our from our XX% quarter. the impacted within by resulting Our increased income investment income operating

moving we we us to the only the Now cash while million, quarter sheet. quarter flow Dragonfly QX, $XXX to balance We the of XX% ended at production, cash inventory versus reduction ended of as expect cash. with of million operating procure We converting million cash up within quarter, fourth requiring on focused in performance short-term investments levels exceeding to achieving $XX continue optimization components. into operating time $XXX our remain consistent operating and lead inventory longer to income Inventory $X further the ramp of do flow million, revenue. XXX% drive

$XXX quarter. to Now million between We for second the currently our be for quarter second outlook expect turning to million. and $XXX the revenue

expect initiatives XX%, We improve quarters. margins gross in prior reflecting to the discussed the in chain will supply to improvements XX%

we the expenses $XX we expenses, elements and a past each prior we as compensation events. the expect second For in be within quarter million million occur our to between half as year, in Consistent move the second annual compensation annual operating $XX do expect operating these decline year. with

our effective year. rate full may which any occur legislative tax during XX%, tax we changes between be not the potential the expect year to for For impact 'XX, XX% to assume does that

per our count per $X.XX XX.X the share. non-GAAP We anticipate to $X.XX upon expect quarter we second share share Based for approximately to the earnings assumptions, for our diluted quarter shares. be second to between be million these

Our on remains targeted XXXX operating quarterly our improvements. programs for focus in

continued We we that expect improvements in fourth effect to quarters planned that productivity and have will margin provide the several improvement. and take third

metrology addition, expect out of orders. In last from sales very lithography our work margin margin systems the and the an initial we gross as low improving we stronger

back for turn that, And into remainder additional will with Mike? to QX insights it XXXX. Mike I and the of

Michael Plisinski

Mark. you, Thank

the project systems. will levels for record demand revenue for quarter, For second we the Dragonfly AI maintain of compute quarterly

returning expect revenue to As planar Iris's grow metrology power mentioned semiconductor earlier, record applications. led for in near by second levels the we quarter, adoption strong to films

newly the solid-state need to is demand of DRAM drives NAND by for and while the nodes, logic in revenue AI NAND, revenues over driven and increase positions enterprise metrology NAND where both In our have we XXX drives Atlas These advanced servers. soft. high-density enterprise expect The NAND remain of Aspect established of tool and have the top suppliers. several at record stacks projected layers

This process ship panel will volume we and technology. years. the track [ this to R&D. system on first production are be maximize to Through the to ] control both investment realize lithography architectures by we critical supporting quarter, process to demonstrating capital system Also are X support and to next panels. high-performance in lab, customers substrate chiplet high and glass our glass the required PACE new glass solutions allow for over will our on JetStep believe panels We X

advanced substrate areas and discussions we Onto and manufacturing In have process of our across in nearly potential both exciting nodes. to on engaging research important This and Innovation spanning for companies addition, packaging chemistry, is revealing equipment, manufacturing new process in many of partners. era XX development, AI opportunities

Based year nice is on the equipment traction maintain products stronger we our for a will be for and what our improving, the is XXXX. and we providing capital the see year demand going the expectation into in half believed current for the year momentum higher outlook widely incrementally with second our be drivers, to of

questions the from lines. would open like Rachel, covering now our please open And the to analysts. we for call

Operator

[Operator first Your B. question from Ellis with the Instructions] Riley line of Craig Securities. comes

Craig Ellis

Congratulations I see strong we're nodes to been recovery. just a very up advanced Mike, quiet on long by to for following starting it's so start now nice because so on and the wanted execution.

to And the question for wanted gains? NAND the of what to seeing understand of respect gains the you logic are and team then the breadth the breadth that same about? talked I So the with you

Michael Plisinski

Sure.

well So start mean always extremely and we've strong customers. been I NAND in for adopted there. NAND, we'll

Every I about introduction wasn't XD stack think from suppliers are the NAND several Aspect, aware. our customer our Aspects, years of but NAND with using there. high talking just customer the that Atlas ago OCD and penetration we we're we're that perspective, were X, X on ramp every working NAND, adopting are which

did work OCD, these starting we pull market high from we're shafts to to And angles or and around now have demand that. Atlas we multiple all the elevator to Aspect stack that run ] market you several and So while some of benefit measuring years the the sag parameters that's for back. devices recall, where the down tied expect the if tilt, up see these the stacks, [ all

talking we're OCD to I continued are planar expansions orders important are both of that think ramp as proliferation just say position out adoption seeing carved Going asked we -- we're I continued not I about. as wouldn't the seeing a Logic, the much you -- market around and all my involving both Iris the mentioned gate prepared started the was. about how Atlas the when remarks involving we that first that films. in

line position a start repeat business move to to and nice eventually low the see it's in then to So high as pilot establishing volume getting volume. both

Craig Ellis

other a And Advanced in it That's memory into AI-related wafer half and and wondering stronger opportunity. customization could view for opportunity very potential about Dragonfly that Packaging was how strong help for and shrink Specialty. new applications hide relates to you greater It very in Clearly, to the and and question to you that that sounded size second related ship that product talked in a like helpful. 'XX? factors I starts if very, was thinness then follow-up bandwidth is your XQ.

Michael Plisinski

on time Yes. sizing. sizing the metrology a is is the up rates. question item, sampling with And challenge we Every always bring the

knobs Right that they we more, to logic relatively low tied the but talked there's they're memory, and about. to so know can number high becoming advanced a now, they're these just still wafers they're high-value thin of to total we value, turn. it's high-bandwidth So compared couple are a tied wafers, problem, we know of

So in a control. that them lot process will of the justify value

seeing we're logic, understand, and So this several we're also manufacturers device customers, is particularly okay, automotive. to for specialty this but technology, memory just trying some adopting not other us,

widely hot Is this solve X technology an be are So application? process just is emerging -- is all this it to XXX% like per factory? going for Or going every be thin have These critical be a to more is steps. challenge. out wafer it to X going must to coming at certain or

the at interest break the And inside I out bad losing the think an wafers But premature. defects bring having and a little the sizing wafers having but these customers it impact. would to requalify that and that's tool, stop from $XX,XXX the tool, enough, capturing clean or tool a which look not and bit also up obviously production, when be of -- compared risk it into entire I to line, then

So could be. we'll of year, have see. size the where of we'll new understanding the the end towards think I technology of better this But much sensor

Craig Ellis

color without quantification, with the But -- as we helpful That's another up Mike. my Yes. it even at think maybe just specific about way go following year.

single-digit help of half the than digit? first that a can talking we growth magnitude us single half. about see mid, clearly gains you on high low half-on-half stronger color second with. Are Any You half-on-half

Michael Plisinski

digits. Single

use X% something like the in numbers, think incremental, to middle, I the X%, X% when X-ish. land you So of this to word X% kind can

Operator

next Stifel. question the Brian Your with of comes line Chin from

Brian Chin

Ask a questions. few

strengthened. expectation second And like half clarify, half? first for versus sounds you expect your has I to do just it also somewhat improvement higher in in second packaging guess, So to be first, half WFE

Michael Plisinski

I better than was quarters. I in it expect prior be indicating to

of be about low the now, Based I quarter talked right a always digestion say digestion period velocity to digestion it's reigniting discussions period. some it I've still in expect that could But more later. a could be the then and on So probably of a period. be like what think and level orders quarter this, and things I'd digestion I muted

Brian Chin

Got it.

So when -- or the say you're you third talking about second quarter, quarter? saying you are quarter

Michael Plisinski

we that No, maintaining remarks record these to levels. second quarter, my be I mentioned in expect

lot where past, in. be but over down, it quarter, the to it yet. going we all the to an but is going the We would continuing timing trend to a on, third slightly in of be some we of know Exactly in. which strong don't is There's Then pulling quarter the stuff and all thought fourth not clear. be. So towards it is shakes been Is improvement won't a very second come quarter, going be discussions out. fourth there's I in

Brian Chin

not onwards your maybe in maybe little that is improvement how than delays year know that that, I sound catch you Yes. did for anticipated those to but your including QX? And expected are up And just And of tied it does that bit QX. in impact XQ a that Was if happen some don't you softer -- in in was specialty? outlook for broad-based? in the like specialty maybe

Michael Plisinski

I think category semi by of specialty very we mean But specialty if strong one is might it includes to. in because course, talked power mean because power you specialty, semiconductors. AP the is

levels. near reaccelerating. be in We semiconductors projected the to it And mentioned quarter, will peak we be the weak. So power in quarter, but was weak second it's first it

have sure if we set mentioned to relatively being last it we flattish year. And about to not but in I we have today, the I'm comments, record talked prior talked

might digits relatively it up record set being single down maybe pull last semi. but will end we to power flattish up, or slightly the So year flat, in so

So we're half power stronger for a semiconductors. second expecting much

Brian Chin

your you know but levels you're peak lapping even last Got just are one know pretty now demand customers sort in. I what sort talk about record I already if 'XX? tool. XXXX, sneak and of it. production for of Okay. early obviously, from qualitatively, I in to Dragonfly terms that of advanced And about for it's in could packaging And one their indications receiving

to to make I you can imagine earlier happen of need discussions so advance? the these prepare sure kind in capacity And

Michael Plisinski

You'd too. wish the way that I think imagine would that. customers

We discussions about are having XXXX.

still So I say right? they're for that that already. positive say supplying the though. early in particular discussions, just it's too for entire what already would So we're packaging to those demand means having our year, customers seeing would for AI, I it's say

talking what's just year. into starting this going only they're already We're year, next about and

advanced So course, we you've I'd in of got positive nodes that's And expect say more meaningfully then, to improve the indication a for XXXX. XXXX. that

So all hitting on there's optimism some for XXXX. in cylinders

Operator

the from of with comes line Shi question Next Charles Needham.

Yu Shi

Mike, ask of Mark. to questions. Thanks for me couple a getting

similar higher one, QX the year, chip of supporting about Dragonfly last is probably starting total So ramp. I $XXX of of the talked I math If first million the think the the AI you sounds it's if my in revenue terms from orders right, XX% deliver saying to think orders kind year to of strength, quarter. first worth $XXX QX level, next you're half And the maintain this last the entire going is you're by of year. million flattish, like at the of the end

did second just you about are little said not you that there same but of I received you But bit the this that a deliver digestion half already potential ahead. year, recall also will in level. orders notice at talked I

half into part of kind What's help understand the of with So you're this can compared revenue. the particular first run you the rate us Dragonfly seeing? levels half second currently that

Michael Plisinski

conclusion is that million say math, have through nearly So QX, your all we $XXX for was general burned know received more of ever would orders. in correct. We but would the the if or don't I exactly all I less

significant. improved, a, slight confidence of course, since Brian, other Of mentioned where There believe a I'm many period Brian not dip, now may I that received then, we've that, as orders but I earlier, less my seeing be talked such before, digestion I about that. to it's has

and call, last our we packaging They're coming the since spoke. because X the continued can't the They're really yet. QX, strengthened come all just last have I On from of all And so say coming AI know yes, logic providers. specificity. HBM in I So QX we to yes, in. say in timing, and can orders that with But don't since time that they've from suppliers.

Yu Shi

Got it.

especially seeing of mid-single than bit So Mike, AI-related higher digestion obviously, a potentially to of first half digit second half, maybe considered little Dragonfly.

you mentioned I interesting. kind think few things a was of

You're around maybe of to a seeing early little an all data bit related demand.

already. seeing increased some And something really that you're mentioned you is the demand NAND also interesting

everybody recovery worst it's of WFE the right now. part So probably on because is focusing the performing NAND

that kind on that's a if now it, green or upgrades So to you're nature the the going or product the penetration I I going right is what's this wonder of -- about addition technology there shoots start. is some seeing of call of on capacity

So would on any color helpful. NAND be

Michael Plisinski

a it's demand. I transition of Yes. more technology believe

tooling that to higher-performing into So I because these drives, drives. generations. factory support believe expansions, think it's NAND lines of I going been prior a that existing And AI there's require there of solid-state servers so believe I don't and a repurposing is was lot

they're revamping. what is doing they're So repurposing,

And this my tools measure channel difficult. critical of because these of very only over And one XXX stack we're that this stacks yield. very, seeing NAND. for measure to holes particular, why business orders high the a parameter is And was we're knowledge, to can in that's

driving that's So part. that

say, of orders I for we've think mean, XX technology all all about new like gate to process around -- months that transistor all it's manufacturers a around not gate gate now. probably I you over wouldn't around also. year, asked gaining multiple of from I been support

continuation that. includes well. So this of as some is just of nice that films kind a it Iris It's

So my there's coming. reaffirmation But of important a a we're think shouldn't transition. seeing position our don't ramp within a coming. this and still ramp People there's preparing share share I node a our still for that opportunities are layer comments from take you ramp. or

Yu Shi

is you're forward but specialty a is quick looking Got $XXX. $XXX last it. the devices the clarification. packaging was that the revenue advanced maybe a in one But I heard Mark, Mark. release, we quarter, it's this ramp. I think Maybe saying to for and are all But thing, press last

wonder one final which is those numbers, X the between So one?

Mark Slicer

be Yes, the it would $XXX.

Operator

Duley David with Steelhead of from comes question line Securities. next Your the

David Duley

expand big customers further going foundry with there's of point? have customers capacity. then for push you've Congratulations follow-on one tools but a this to I'm I lithography out glass if logic or by broaden guess lithography to and And now just substrates, all, packaging. pushed advanced And in I I'll questions just a you first that their applications your do on the are answer first. to OSATs wondering nice let by have been seen at results. My either about

Michael Plisinski

Okay. believe are are what exactly don't so, some Applications, applications our and of know customers, but don't serving. we which customers the often I

serve some some vertical. customers and So are multiple

is don't know remaining compute. or we've calls. would earnings different We applications. So I to been compute about high-performance that's of that expanded. talked I XX% It's high-performance the willing through be bet customers added it that if XXX%

step we the and traditional up can about lines where with that we've customer. the substrates for customers instance, existing on For a new remarks do factories and new talked JetStep. expand lines new also glass new our prepared is glass And IC and had open

So that's also a for nice us. positive

look to compute and get start again. server market recover obviously customers starts the the to we that as ahead, really expecting market As we're starts high-performance server additional to adding healthy

David Duley

of of glass technology. customers advanced some adoption Could more to as your it talk major that Now are what kind substrates, adopt GPU GPU the or going as packaging packaging labs will guys move market advanced might structures. about start of which to I more the just something a that of big some adopt I is I for substrates first? you the of that start GPU? And parts and sort And road map thought help the with that to of far was the to chiplet to guess beneficial that, was thought

Michael Plisinski

Yes.

a it's couple think things. I of So

we complicated process So efficiently have this are going productively. up be connecting ends that quite architecture, to being die chiplet high and and first, to for multiple a volume, large volume package so we

towards that to fits going frame. I in move think everything panel is that

to and sure, substrate. for you what's more can the wafer of in for below on that's can to because, RDL, IC for maybe smaller X, of has let's mentioned. sure. But not micron used. interconnects maybe you and from, use RDL, GPU happening you push that, these to type now, like, X smaller is Right basis, going that, to some down stable quite instance, XX X X, We're you applications something silicon, be a microns glass as Why addition say, drive

be going much scale, more be believe, for to And glass. panel else broader going on is something will efficient. we that, But a to

micron will heat some So well. There's glass allow X it at as advantages RDL, table. dissipation with

we to a develop lot And to wafer and etching, so processing the of with help of usher substrate usher in the lot for centers overall including challenges, can but the ecosystem solutions a adoption for identify it, these part application working with a not in, -- there's panel market. but at of of and challenges our that's so speed glass form that the

this developing chemistries, cetera, with also through the not of And our just is then but things chemistries, capability. capability -- process et control drilling, And other this. lithography partners, the the some resist like the laser etching, solutions, involving

David Duley

Is an glass use I just substrates to as that of to for, feature type to technology? start for summarize, better high-density mentioned, that So are GPUs architecture way enabling you guess, interconnects.

Michael Plisinski

have then be volumes the an from have would but to yes, enabling wafer That also speaking, they'd justify panel. to moving to

Operator

your from Vedvati line the with And Shrotre question Evercore. of comes next

Vedvati Shrotre

orders. I about the terms times? Could going inspection what's us with on to wanted the months of kind your that for remind to same X Dragonfly they in Are the lead products? packaging lead double-click times X on of you you trajectory advanced talked

Michael Plisinski

because times Yes, build I lead forecast. the lead to we I would a they're times. same is say mean, interesting

customers, But our of to parts what with to is customers going -- and bringing and kind a not on ordering X-month in it's forecasting so lead then from thing. it we would time. time a window work That we a changed. is to our of So and about that a that work work lead order with year on like hasn't be X-

ramped, we've that. Even we've maintained as

Vedvati Shrotre

it. Got

what's and book there more added? of Or you provide on going could to talk trying XQ, right your about order where So you're is that just could that digestion right primarily now? second this when kind could more be of half the on conservatism I'm if understand, the some and in book a order in is color kind be off based you that? now,

Michael Plisinski

possible. as So as accurate I try be to

we have just perfect will a not what occur, we it's and order knowledge. don't the It's So project books.

get So around move because have is get they too so shouldn't be move plans in And or actually, the could up we has nothing -- pulled ramp pushed out, and could on they everything to hung customers other struggle some honest, QX, aggressive things as around things in. more QX been been areas. moving

still think I at on be, do say, There our least right will second That's we put based there half be orders? now, see I'm it But that -- it And happen. be could view that what think a Absolutely. will well, and let's digestion. could my knowledge will dip, we now, let's most right not could happen. way. what change? that So a is discussions with But Could more best, customers add now, happening you. accurate sharing are the

Vedvati Shrotre

helpful. versus Right, a between HBM non-HBM a between different that's trend is there customers? bucket And is -- or order there

Michael Plisinski

I driving advanced ordering But memory wouldn't HBM and We of orders DRAM slow. our different the say a lot driving But is as sure, there. lot a a here The there's is business. high-bandwidth incremental for ton well. business. packaging logic is is trend. a get pretty driving still -- mean of I logic

So...

Vedvati Shrotre

between pretty digestion and non-HBM well the is products? So HBM spread

Michael Plisinski

tied it's say would I AI. to

tied So very it's specifically. actually it's AI to

power advanced is nodes the growing. So in growing, half we second see semiconductor

and on. we us see with and question a that customers are to so is surge is strong, I And the the less. be are going spread These around things in a that because to get working think down little much. Is possible. it's it's all the big I QX so been AI think, ramped then going QX

Vedvati Shrotre

Right.

then I shifting think to And devices. Okay. gears specialty

power grow semi the year? giving So companies have down mean, most What's you year. CapEx remainder this their to through, I of of started take that of the sort continues the confidence to this

Michael Plisinski

companies, can really a high can yields, more interesting or up have really, go if output can the more driving driving and help on process tools spend is dynamic don't with and and by is means the Well, time up, process address in then identify on the yields driving the capital that occurring yield loss where that's they generally they bringing they in this, control, on like focus to they yields focus more in that. focus either sophisticated driving

So customers. that that's and what the comes And from conversations our right confidence the having our seeing backlog we're with now. we're

right power confident the pretty now So remain in semi strong.

Vedvati Shrotre

on back year? then your advanced nodes, this the of the half is And visibility into how

Michael Plisinski

good. and the say as is will I'd But it's customers are those things The track, ramping moved. It's we stay -- customers see. good long as see factories on have. new what those what as lines. opening visibility as we the have new And

So we've that. But you our And delays them guarantee are that contact, but frequently, optimistic seen are any can't I announced large can and of delays frequently. by working in be those in some meeting won't baked with with we're there all that more, customers. tell we're I close them we

sharing And soon with think they're as so I they us. at least as know, it

Vedvati Shrotre

Right.

quarter And be here assume so is growth every it fair to that it will kind of sequential a onwards?

Michael Plisinski

Yes.

that's think I nodes, fair pretty Yes. say. to advanced For

Vedvati Shrotre

one last squeeze in. that one maybe then And I'll Right.

mentioned in gross us you of and be back half Could expenses this quantify side, that? Like margins On should year. the gains kind operating you around of help productivity the what margin coming we at? looking kind of

Mark Slicer

to mean I we're gross quarter-over-quarter have improvement. projecting think No, I from Yes. gross margin the mean, margin standpoint, sequential I

to XXXX as levels that I stated before, the we've seen goal historically would we think that at is exit level. our be at -- back that that revenue

have As and efficiencies. our working plans it's we driving said with that through it's before, working with plans in we place, the suppliers,

to for say be of back of with to the would higher improvement I us planned quarter-over-quarter. in way half year. first is half decline the margin compensation some always we tends the be hitting. of a do the thoughtful do So slight year the But in again, elements Operating expenses the would it a see

QX. be the of peak So expenses above wouldn't I expect operating to

Operator

from comes with question next You Miller The of Benchmark the line Mark Company.

Mark Miller

percent mentioned bandwidth high backlog high you memory terms bandwidth to the certainly applications? of was a for major been of current that you your related backlog, role. estimate Just what has playing in AI memory Can wondering, is

Michael Plisinski

I in front don't that the but I have of percentage it's high backlog. me, a of would say

Mark Miller

significant And your do you to what of constituents also next the this. will the will be a And gate year, increasing one most as do that dangerous percent But extrapolating how of around, all that extrapolating, be that it's did backlog? think of your always backlog?

Michael Plisinski

I X to and months don't much about of the forecast backlog because our in build that X so worry of the thing. to kind

But So for HBM backlog powerful, interesting. us answer Ever are of business so going to years, during a wasn't but COVID was interesting. good our I'd this would big was say your say, prior XX that indicator question, go. of a I is, where backlog to

of there bubble So lot ramping happening. a There's concern a capacity HBM. is the of for

and position. trying share to several gain I are think gain players

the current maintain. leader And to is trying

So AI of such remains other coming that part, and used up gets capacity? capacity that ramp. and really that all don't big be continue there's much. projections outstrip lot seen, memory see so is I in know we'd another and come it a to on, does That Or players HBM excess to

gate-all-around gate larger I a would expect revenue I would that, with So be say backlog all towards around, -- be part would would half year. especially our next for the a second larger or of

Mark Miller

newer finally, being driven Dragonfly new improving higher tools, picture. the with profiles margin And by that mentioned Is such having an your then you as margin sensor?

Michael Plisinski

this start and about, were about chain year, adding It's talked That's lot last quarter-by-quarter, a -- also initiatives in part year expected even that supply of the starting cutting quarter-by-quarter. we've of to those it.

from that, improvements So seeing we're too.

adoptions, We're opportunities nodes also merger. own So we our the through growth another it's but have taking impact, The chain new the will we're supply advanced and control really have some new product addressing products start destiny. of to twofold. where the of that's and

Operator

turn session. additional the back today's would concludes question-and-answer closing or I to like call for Mike This Sheaffer to remarks. any now

Michael Sheaffer

today. Thanks again for us joining

upcoming quick reminder about a X Just for events. everybody

on First, Beverly Riley Annual and Institutional the management be XX Conference in Onto May XX. Hills in Investor participating will B.

in participating being And X. in and Wolfe Cross-Sector Stifel we'll for X. on held you York we'll Boston today X:XX call the New at and X is Research Next, June available the Insight June replay Small going be evening. this Innovation. Conference approximately in Time Conference on continued thank finally, website in be I Mid-Cap on A to your of like Eastern would interest to Onto the be our

Rachel, the please conclude call.

Operator

your does This Thank today's participation. call. for you. Thank conclude you

now disconnect. You may

Onto Innovation (ONTO) 9 May 242024 Q1 Earnings call transcript