Onto Innovation Inc (ONTO - Free Report) reported third-quarter 2023 earnings of 96 cents per share, which beat the Zacks Consensus Estimate by 1.1%. The bottom line decreased 28.9% year over year.
Revenues of $207.2 million lagged the Zacks Consensus Estimate by 3.6%. The top line declined 18.5% year over year. The fall can be mainly due to the delayed shipment of two lithography systems to chiplet substrate manufacturers in the quarter under review. A decline in the advanced nodes segment’s revenues also acted as a headwind.
Specialty devices and advanced packaging revenues of $135 million increased 20% sequentially. Revenues from software and services grew 13% to $46 million. Revenues from advanced nodes market stood at $26 million in the quarter under review.
Sales from specialty devices and advanced packaging, and advanced node markets contributed 65% and 13% to revenues, respectively. Software and services accounted for 22% of the top line.
Margin Details
Non-GAAP operating expenses were $57.3 million, dipping 5.4% from $60.6 million in the prior-year quarter.
Non-GAAP gross profit fell to $106.9 million from $138.8 million in the year-earlier quarter. Non-GAAP gross profit margin contracted 300 basis points to 52%.
Non-GAAP operating income was $49.6 million compared with $78.3 million in the year-ago quarter. Non-GAAP operating margin was 24%, down from 31% in the previous-year quarter.
Balance Sheet
As of Sep 30, the company had $629.7 million in cash and cash equivalents with $135.8 million of total current liabilities compared with $609.6 million and $136.9 million, respectively, as of Jul 1, 2023. Accounts receivable was $209.5 million.
Q4 Guidance
Management expects revenues in the range of $200-$216 million. The Zacks Consensus Estimate is pegged at $215.1 million.
Non-GAAP earnings per share are projected to be between 90 cents and $1.10. The consensus mark is pegged at 95 cents.
Zacks Rank
Onto Innovation currently has a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks worth consideration in the broader technology space are Asure Software (ASUR - Free Report) , Synopsys (SNPS - Free Report) and Cadence Design Systems (CDNS - Free Report) . While Asure Software flaunts a Zacks Rank #1 (Strong Buy), Synopsys and Cadence carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Asure Software’s 2023 EPS has increased 5.9% in the past 60 days to 54 cents.
Asure Software’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 676.4%. Shares of ASUR have climbed 25.5% in the past year.
The Zacks Consensus Estimate for Synopsys’ fiscal 2023 EPS has remained flat in the past 60 days at $11.09. SNPS’ long-term earnings growth rate is 16.7%. Shares of SNPS have gained 52.5% in the past year.
The Zacks Consensus Estimate for Cadence 2023 EPS has improved 0.4% in the past 60 days to $5.11.
Cadence’s earnings outpaced the Zacks Consensus Estimate in each of the last four quarters, the average earnings surprise being 4.1%. Shares of CDNS have jumped 53.7% in the past year.
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Onto Innovation Inc (ONTO - Free Report) reported third-quarter 2023 earnings of 96 cents per share, which beat the Zacks Consensus Estimate by 1.1%. The bottom line decreased 28.9% year over year.
Revenues of $207.2 million lagged the Zacks Consensus Estimate by 3.6%. The top line declined 18.5% year over year. The fall can be mainly due to the delayed shipment of two lithography systems to chiplet substrate manufacturers in the quarter under review. A decline in the advanced nodes segment’s revenues also acted as a headwind.
Specialty devices and advanced packaging revenues of $135 million increased 20% sequentially. Revenues from software and services grew 13% to $46 million. Revenues from advanced nodes market stood at $26 million in the quarter under review.
Sales from specialty devices and advanced packaging, and advanced node markets contributed 65% and 13% to revenues, respectively. Software and services accounted for 22% of the top line.
Margin Details
Non-GAAP operating expenses were $57.3 million, dipping 5.4% from $60.6 million in the prior-year quarter.
Non-GAAP gross profit fell to $106.9 million from $138.8 million in the year-earlier quarter. Non-GAAP gross profit margin contracted 300 basis points to 52%.
Non-GAAP operating income was $49.6 million compared with $78.3 million in the year-ago quarter. Non-GAAP operating margin was 24%, down from 31% in the previous-year quarter.
Balance Sheet
As of Sep 30, the company had $629.7 million in cash and cash equivalents with $135.8 million of total current liabilities compared with $609.6 million and $136.9 million, respectively, as of Jul 1, 2023. Accounts receivable was $209.5 million.
Q4 Guidance
Management expects revenues in the range of $200-$216 million. The Zacks Consensus Estimate is pegged at $215.1 million.
Non-GAAP earnings per share are projected to be between 90 cents and $1.10. The consensus mark is pegged at 95 cents.
Zacks Rank
Onto Innovation currently has a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks worth consideration in the broader technology space are Asure Software (ASUR - Free Report) , Synopsys (SNPS - Free Report) and Cadence Design Systems (CDNS - Free Report) . While Asure Software flaunts a Zacks Rank #1 (Strong Buy), Synopsys and Cadence carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Asure Software’s 2023 EPS has increased 5.9% in the past 60 days to 54 cents.
Asure Software’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 676.4%. Shares of ASUR have climbed 25.5% in the past year.
The Zacks Consensus Estimate for Synopsys’ fiscal 2023 EPS has remained flat in the past 60 days at $11.09. SNPS’ long-term earnings growth rate is 16.7%. Shares of SNPS have gained 52.5% in the past year.
The Zacks Consensus Estimate for Cadence 2023 EPS has improved 0.4% in the past 60 days to $5.11.
Cadence’s earnings outpaced the Zacks Consensus Estimate in each of the last four quarters, the average earnings surprise being 4.1%. Shares of CDNS have jumped 53.7% in the past year.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
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