4 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30,
−Removed: September 30,
Cost of revenue
6 unchanged sentences
Interest income, net
−Removed: Other expense, net
+Added: Other income (expense), net
Income before provision for income taxes
7 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30,
−Removed: September 30,
Other comprehensive loss, net of tax:
2 unchanged sentences
Change in currency translation adjustments
−Removed: Total other comprehensive loss, net of tax
+Added: Total other comprehensive (loss) income, net of tax
Total comprehensive income
3 unchanged sentences
(In thousands)
−Removed: September 30,
Current Assets:
8 unchanged sentences
Deferred income taxes
−Removed: LIABILITIES AND STOCKHOLDERS’
+Added: LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
4 unchanged sentences
Total current liabilities
−Removed: Deferred income taxes
Other non-current liabilities
1 unchanged sentence
Commitments and contingencies
−Removed: Stockholders’
+Added: Stockholders’ equity:
Additional paid-in capital
1 unchanged sentence
Accumulated earnings
−Removed: Total stockholders’
−Removed: Total liabilities and stockholders’
+Added: Total stockholders’ equity
+Added: Total liabilities and stockholders’ equity
The accompanying notes are an integral part of these financial statements.
2 unchanged sentences
(In thousands)
−Removed: Nine Months Ended
−Removed: September 30,
+Added: Three Months Ended
Cash flows from operating activities:
3 unchanged sentences
Share-based compensation
−Removed: Write-off of acquired in-process research and development
Provision for inventory valuation
5 unchanged sentences
Proceeds from maturities and sales of marketable securities
−Removed: Acquisitions, net of cash acquired
Purchases of property, plant and equipment
−Removed: Net cash and cash equivalents used in investing activities
+Added: Net cash and cash equivalents (used in) provided by investing activities
Cash flows from financing activities:
1 unchanged sentence
Tax payments related to shares withheld for share-based compensation plans
−Removed: Payment of contingent consideration for acquired business
Issuance of shares through share-based compensation plans
1 unchanged sentence
Effect of exchange rate changes on cash and cash equivalents
−Removed: Net increase in cash and cash equivalents
+Added: Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
4 unchanged sentences
ONTO INNOVATION INC.
−Removed: CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’
+Added: CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)
4 unchanged sentences
share-based compensation
−Removed: Purchases of common stock
Share-based compensation plan
Currency translation
−Removed: Unrealized gain on investments
−Removed: Balance at April 1, 2023
−Removed: Share-based compensation
−Removed: Issuance of shares through
−Removed: share-based compensation
−Removed: Share-based compensation plan
−Removed: Currency translation
Unrealized loss on investments
−Removed: Balance at July 1, 2023
−Removed: Share-based compensation
−Removed: Issuance of shares through
−Removed: share-based compensation
−Removed: Share-based compensation plan
−Removed: Currency translation
−Removed: Unrealized gain on investments
−Removed: Balance at September 30, 2023
+Added: Balance at March 30, 2024
Comprehensive
−Removed: Income / (Loss)
−Removed: Balance at January 1, 2022
−Removed: Share-based compensation
−Removed: Issuance of shares through
−Removed: share-based compensation
−Removed: Share-based compensation plan
−Removed: Currency translation
−Removed: Unrealized loss on investments
−Removed: Balance at April 2, 2022
+Added: Balance at December 31, 2022
Share-based compensation
1 unchanged sentence
share-based compensation
+Added: Purchases of common stock
Share-based compensation plan
1 unchanged sentence
Unrealized gain on investments
−Removed: Balance at July 2, 2022
−Removed: Share-based compensation
−Removed: Issuance of shares through
−Removed: share-based compensation
−Removed: Purchases and retirement of common stock
−Removed: Share-based compensation plan
−Removed: Currency translation
−Removed: Unrealized loss on investments
−Removed: Balance at October 1, 2022
+Added: Balance at April 1, 2023
The accompanying notes are an integral part of these financial statements.
4 unchanged sentences
The accompanying interim unaudited Condensed Consolidated Financial Statements have been prepared by Onto Innovation Inc.
−Removed: (together with its consolidated subsidiaries, unless otherwise specified or suggested by the context, the “Company,”
−Removed: “Onto Innovation,”
−Removed: “we,”
−Removed: “our”
−Removed: or “us”) and in the opinion of management reflect all adjustments, consisting of normal recurring accruals, necessary for their fair presentation in accordance with accounting principles generally accepted in the United States of America (“U.S.
−Removed: GAAP”).
+Added: (together with its consolidated subsidiaries, unless otherwise specified or suggested by the context, the “Company,” “Onto Innovation,” “we,” “our” or “us”) and in the opinion of management reflect all adjustments, consisting of normal recurring accruals, necessary for their fair presentation in accordance with accounting principles generally accepted in the United States of America (“U.S.
Preparing financial statements requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes.
Actual amounts could differ materially from reported amounts.
−Removed: The interim results for the three and nine months ended September 30, 2023 are not necessarily indicative of results to be expected for the entire year or any future periods.
−Removed: This interim financial information should be read in conjunction with the financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”) filed with the Securities and Exchange Commission (“SEC”) on February 24, 2023.
+Added: The interim results for the three months ended March 30, 2024 are not necessarily indicative of results to be expected for the entire year or any future periods.
+Added: This interim financial information should be read in conjunction with the financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 30, 2023 (the “2023 Form 10-K”) filed with the Securities and Exchange Commission on February 26, 2024.
The accompanying Condensed Consolidated Balance Sheet at December 30, 2023 has been derived from the audited consolidated financial statements included in the 2023 Form 10-K.
The Company operates on a 52- or 53-week fiscal year ending on the Saturday closest to December 31.
−Removed: Our fiscal year ending December 30, 2023 (“fiscal year 2023”) is a 52-week fiscal year.
−Removed: The first quarter of the Company’s fiscal year 2023 ended on April 1, 2023, the second quarter ended on July 1, 2023 and the third quarter ended on September 30, 2023.
+Added: Our fiscal year ending December 28, 2024 (“fiscal year 2024”) is a 52-week fiscal year.
+Added: The first quarter of the Company’s fiscal year 2024 ended on March 30, 2024, the second quarter ends on June 29, 2024 and the third quarter ends on September 28, 2024.
Our fiscal year ended December 30, 2023 was a 52-week fiscal year.
−Removed: The third quarter of the fiscal year ended December 31, 2022 ended on October 1, 2022.
+Added: The first quarter of the fiscal year ended December 30, 2023 ended on April 1, 2023.
Use of Estimates
1 unchanged sentence
GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.
−Removed: Significant estimates made by management include excess and obsolete inventory, fair value of assets acquired and liabilities assumed in a business combination, recoverability and useful lives of property, plant and equipment and identifiable intangible assets, recoverability of goodwill, recoverability of deferred tax assets, allowance for credit losses, liabilities for product warranty, contingencies, including litigation reserves and share-based payments and liabilities for tax uncertainties.
+Added: Estimates made by management include excess and obsolete inventory, fair value of assets acquired and liabilities assumed in a business combination, recoverability and useful lives of property, plant and equipment and identifiable intangible assets, recoverability of goodwill, recoverability of deferred tax assets, allowance for credit losses, liabilities for product warranty, share-based payments and liabilities for tax uncertainties.
Actual results could differ from those estimates.
4 unchanged sentences
Adoption of Accounting Standards
−Removed: There have been no recent accounting pronouncements or changes in accounting pronouncements during the three and nine months ended September 30, 2023, as compared to the recent accounting pronouncements described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, that are of significance, or potential significance to the Company.
+Added: Recently Adopted or Effective
+Added: There have been no recent accounting pronouncements or changes in accounting pronouncements during the three months ended March 30, 2024, as compared to the recent accounting pronouncements described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 30, 2023, that are of significance, or potential significance to the Company.
+Added: Updates Not Yet Effective
+Added: In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting (Topic 280):
+Added: Improvements to Reportable Segment Disclosures,” which expands disclosures about a public entity’s reportable segments and requires more enhanced information about a reportable segment’s expenses, interim segment profit or loss, and how a public entity’s chief operating decision maker uses reported segment profit or loss information
+Added: in assessing segment performance and allocating resources.
+Added: The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.
+Added: The Company is required to adopt this standard in the fiscal year 2024 for the annual reporting period ending December 28, 2024, with retrospective disclosure of prior periods presented.
+Added: The Company is currently in the process of evaluating the impact of adoption on its Consolidated Financial Statements.
+Added: In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740):
+Added: Improvements to Income Tax Disclosures,” which requires public entities to disclose consistent categories and greater disaggregation of information in the rate reconciliation and for income taxes paid.
+Added: It also includes certain other amendments to improve the effectiveness of income tax disclosures.
+Added: The guidance is effective for financial statements issued for annual periods beginning after December 15, 2024, with early adoption permitted.
+Added: The Company is required to adopt this standard prospectively in fiscal year 2025 for the annual reporting period ending December 27, 2025.
+Added: The Company is currently in the process of evaluating the impact of adoption on its Consolidated Financial Statements.
Fair Value Measurements
8 unchanged sentences
Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the asset or liability.
−Removed: Level 3 inputs are unobservable inputs based on management’s assumptions used to measure assets and liabilities at fair value.
−Removed: A financial asset’s or liability’s fair value measurement classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.
−Removed: The following tables provide the assets and liabilities carried at fair value measured on a recurring basis at September 30, 2023 and December 31, 2022:
+Added: Level 3 inputs are unobservable inputs based on management’s assumptions used to measure assets and liabilities at fair value.
+Added: A financial asset’s or liability’s fair value measurement classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.
+Added: The following tables provide the assets and liabilities carried at fair value measured on a recurring basis at March 30, 2024 and December 30, 2023:
Fair Value Measurements Using
−Removed: Quoted Prices in
−Removed: Active Markets for
−Removed: Identical Assets
−Removed: Significant Other
−Removed: Observable Inputs
−Removed: Unobservable Inputs
−Removed: September 30, 2023
+Added: Significant Other Observable
+Added: Inputs (Level 2)
Available-for-sale debt securities:
Government notes and bonds
−Removed: Asset-backed securities
Certificates of deposit
2 unchanged sentences
Foreign currency forward contracts
−Removed: December 31, 2022
−Removed: Available-for-sale debt securities:
−Removed: Government notes and bonds
−Removed: Asset-backed securities
−Removed: Certificates of deposit
−Removed: Commercial paper
−Removed: Corporate bonds
Foreign currency forward contracts
1 unchanged sentence
Available-for-sale debt securities classified as Level 2 are valued using observable inputs to quoted market prices, benchmark yields, reported trades, broker/dealer quotes or alternative pricing sources with reasonable levels of price transparency.
−Removed: The foreign currency forward contracts are primarily measured based on the foreign currency spot and forward rates quoted by the banks or foreign currency dealers.
+Added: The foreign currency forward contracts are primarily measured based on the foreign currency spot and forward
+Added: rates quoted by the banks or foreign currency dealers.
Investment prices are obtained from third party pricing providers, which model prices utilizing the above observable inputs, for each asset class.
−Removed: See Note 3 for additional discussion regarding the fair value of the Company’s marketable securities.
+Added: See Note 3 for additional discussion regarding the fair value of the Company’s marketable securities.
Marketable Securities
−Removed: At September 30, 2023 and December 31, 2022, marketable securities are categorized as follows:
+Added: At March 30, 2024 and December 30, 2023, marketable securities are categorized as follows:
Amortized Cost
1 unchanged sentence
Gross Unrealized Holding Losses
−Removed: September 30, 2023
+Added: March 30, 2024
Government notes and bonds
−Removed: Asset-backed securities
Certificates of deposit
4 unchanged sentences
Government notes and bonds
−Removed: Asset-backed securities
Certificates of deposit
2 unchanged sentences
Total marketable securities
−Removed: The amortized cost and estimated fair value of marketable securities classified by the maturity date listed on the security, regardless of the Condensed Consolidated Balance Sheets classification, is as follows at September 30, 2023 and December 31, 2022:
−Removed: September 30, 2023
+Added: The amortized cost and estimated fair value of marketable securities classified by the maturity date listed on the security, regardless of the Condensed Consolidated Balance Sheets classification, is as follows at March 30, 2024 and December 30, 2023:
+Added: March 30, 2024
December 30, 2023
3 unchanged sentences
Due after one through five years
−Removed: Due after five years
+Added: Due after five through ten years
+Added: Due after ten years
Total marketable securities
The Company has evaluated its investment policies and determined that all of its marketable securities, which are comprised of debt securities, are to be classified as available-for-sale.
−Removed: The Company’s available-for-sale debt securities are carried at fair value, with the unrealized gains and losses reported in Stockholders’
−Removed: equity under the caption “Accumulated other comprehensive income (loss).”
−Removed: Gross realized gains and losses on available-for-sale securities are included in “Other expense, net”
−Removed: on the Condensed Consolidated Statements of Operations and were not material during the three and nine months ended September 30, 2023 and October 1, 2022.
+Added: The Company’s available-for-sale debt securities are carried at fair value, with the unrealized gains and losses reported in Stockholders’ equity under the caption “Accumulated other comprehensive loss.” Gross realized gains and losses on available-for-sale securities are included in “Other income (expense), net” on the Condensed Consolidated Statements of Operations and were not material during the three months ended March 30, 2024 and December 30, 2023.
The Company records credit losses for its available-for-sale debt securities when it intends to sell the securities, it is more-likely-than not that it will be required to sell the securities before a recovery, or when it does not expect to recover the entire amortized cost basis of the securities.
The cost of securities sold is based on the specific identification method.
−Removed: The Company has determined that the gross unrealized losses on its marketable securities at September 30, 2023 and December 31, 2022 are temporary in nature.
+Added: The Company has determined that the gross unrealized losses on its marketable securities at March 30, 2024 and December 30, 2023 are temporary in nature.
The Company regularly reviews its investment portfolio to identify and evaluate marketable securities that have indications of possible impairment from credit losses or other factors.
−Removed: Factors considered in determining whether an unrealized loss is considered to be a credit loss include the length of time and extent to which fair value has been less than the cost basis, credit quality and the Company’s ability and intent to hold the securities for a period of time sufficient to allow for any anticipated recovery in market value.
−Removed: The following table summarizes the estimated fair value and gross unrealized holding losses of marketable securities, aggregated by investment instrument and period of time in an unrealized loss position, at September 30, 2023 and December 31, 2022:
+Added: Factors considered in determining whether an unrealized loss is considered to be a credit loss include the length of time and extent to which fair value has been less than the cost basis, credit quality and the Company’s ability and intent to hold the securities for a period of time sufficient to allow for any anticipated recovery in market value.
+Added: The following table summarizes the estimated fair value and gross unrealized holding losses of marketable securities, aggregated by investment instrument and period of time in an unrealized loss position, at March 30, 2024 and December 30, 2023:
In Unrealized Loss Position For
4 unchanged sentences
Gross Unrealized Losses
−Removed: September 30, 2023
+Added: March 30, 2024
Government notes and bonds
−Removed: Asset-backed securities
Certificates of deposit
3 unchanged sentences
Government notes and bonds
−Removed: Asset-backed securities
Certificates of deposit
1 unchanged sentence
Corporate bonds
−Removed: See Note 2 for additional discussion regarding the fair value of the Company’s marketable securities.
+Added: See Note 2 for additional discussion regarding the fair value of the Company’s marketable securities.
Derivative Instruments and Hedging Activities
The Company, when it considers it to be appropriate, enters into forward contracts to hedge the economic exposures arising from foreign currency denominated transactions.
−Removed: At September 30, 2023, these contracts were denominated in euro, Chinese renminbi, Japanese yen, Korean won, Singapore dollar, and Taiwanese dollar.
−Removed: At December 31, 2022, these contracts were denominated in euro, Japanese yen, Korean won, Singapore dollar, Taiwanese dollar, and Chinese renminbi.
−Removed: Foreign currency forward contracts are not designated as hedges for accounting purposes, and therefore, the change in fair value is recorded in “Other expense, net,”
−Removed: in the Condensed Consolidated Statements of Operations.
+Added: At March 30, 2024 and December 30, 2023, these contracts were denominated in euro, Chinese renminbi, Japanese yen, Korean won, Singapore dollars, and Taiwanese dollars.
+Added: Foreign currency forward contracts are not designated as hedges for accounting purposes, and therefore, the change in fair value is recorded in “Other income (expense), net,” in the Condensed Consolidated Statements of Operations.
The Company records its forward contracts at fair value in either prepaid expenses and other current assets or other current liabilities in the Condensed Consolidated Balance Sheets.
The dollar equivalent of the U.S.
−Removed: dollar forward contracts and related fair values as of September 30, 2023 and December 31, 2022 were as follows:
−Removed: September 30, 2023
+Added: dollar forward contracts and related fair values as of March 30, 2024 and December 30, 2023 were as follows:
+Added: March 30, 2024
December 30, 2023
3 unchanged sentences
Intangible Assets
−Removed: Purchased intangible assets as of September 30, 2023 and December 31, 2022 are as follows:
+Added: Purchased intangible assets as of March 30, 2024 and December 30, 2023 are as follows:
Gross Carrying Amount
Accumulated Amortization
−Removed: September 30, 2023
+Added: March 30, 2024
Finite-lived intangibles:
14 unchanged sentences
Inventories, net are comprised of the following:
−Removed: September 30, 2023
+Added: March 30, 2024
December 30, 2023
4 unchanged sentences
Property, plant and equipment, net is comprised of the following:
−Removed: September 30, 2023
+Added: March 30, 2024
December 30, 2023
7 unchanged sentences
Other assets are comprised of the following:
−Removed: September 30, 2023
+Added: March 30, 2024
December 30, 2023
3 unchanged sentences
Accrued liabilities are comprised of the following:
−Removed: September 30, 2023
+Added: March 30, 2024
December 30, 2023
3 unchanged sentences
Other current liabilities are comprised of the following:
−Removed: September 30, 2023
+Added: March 30, 2024
December 30, 2023
3 unchanged sentences
Accrued professional fees
+Added: Other accrued taxes
Total other current liabilities
1 unchanged sentence
Other non-current liabilities are comprised of the following:
−Removed: September 30, 2023
+Added: March 30, 2024
December 30, 2023
5 unchanged sentences
The Company maintains arrangements under which eligible accounts receivable in Japan are sold without recourse to unrelated third-party financial institutions.
−Removed: The Company sold $ 20,639 of receivables during the nine months ended September 30, 2023.
+Added: The Company sold $ 3,447 of receivables during the three months ended March 30, 2024.
These receivables were not included in the Condensed Consolidated Balance Sheets as the criteria for sale treatment had been met.
There were no material gains or losses on the sale of such receivables.
−Removed: There were no amounts due from such third-party financial institutions at September 30, 2023.
+Added: There were no amounts due from such third-party financial institutions at March 30, 2024.
Intellectual Property Indemnification Obligations
6 unchanged sentences
The Company estimates the costs that may be incurred during the warranty period and records a liability in the amount of such costs at the time revenue is recognized.
−Removed: The Company’s estimate is based primarily on historical experience.
+Added: The Company’s estimate is based primarily on historical experience.
The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary.
1 unchanged sentence
Settlements of warranty reserves are generally associated with sales that occurred during the 12 to 14 months prior to the period-end.
−Removed: Changes in the Company’s warranty reserves are as follows:
−Removed: Nine Months Ended
−Removed: September 30,
+Added: Changes in the Company’s warranty reserves are as follows:
+Added: Three Months Ended
Balance, beginning of the period
Balance, end of the period
−Removed: Warranty reserves are reported in the Condensed Consolidated Balance Sheets under the captions “Accrued liabilities”
−Removed: and “Other non-current liabilities.”
+Added: Warranty reserves are reported in the Condensed Consolidated Balance Sheets under the captions “Accrued liabilities” and “Other non-current liabilities.”
Legal Matters
From time to time, the Company is subject to legal proceedings and claims in the ordinary course of business.
−Removed: The following reflects an overview of the material developments with regard to the Company’s pending material legal proceedings.
−Removed: Optical Solutions Inc.
−Removed: Nanometrics Incorporated (Case No.
−Removed: 18-cv-00417-BLF):
−Removed: On August 2, 2017, Nanometrics was named as defendant in a complaint filed by Optical Solutions, Inc.
−Removed: (“OSI”) in New Hampshire Superior Court (the “OSI Action”).
−Removed: OSI’s complaint alleged claims arising from a purchase contract between OSI and Nanometrics.
−Removed: The relief sought was the award of damages in an amount to be proven at trial, attorney’s fees and costs, and such other relief that the court deemed just and proper.
−Removed: The OSI Action was subsequently removed to the United States District Court for the District of New Hampshire and then transferred to the United States District Court for the Northern District of California (the “Northern District of California”).
−Removed: On December 20, 2017, Nanometrics filed its own complaint against OSI in the California Superior Court for the County of Santa Clara alleging claims arising from OSI’s breach of certain purchase orders (the “Nanometrics Action”).
−Removed: The relief sought was the
−Removed: award of damages in an amount to be proven at trial, including pre- and post-judgment interest, punitive damages, restitution for benefits unjustly received by OSI, attorney’s fees and costs, and such other relief the court deemed just and proper.
−Removed: The Nanometrics Action was later removed to the Northern District of California and then consolidated with the OSI Action.
−Removed: On July 7, 2020, after the Northern District of California granted the Company’s motion to dismiss with prejudice with regard to two of OSI’s claims and dismissed two other claims asserted by OSI with leave to amend, OSI filed a Fourth Amended Complaint.
−Removed: On August 14, 2020, the Company filed a motion to dismiss one of the two remaining claims.
−Removed: On December 1, 2020, the Northern District of California denied the Company’s motion and as a result the Company filed its Answer in this matter on December 22, 2020.
−Removed: Discovery is now closed.
−Removed: On March 1, 2023, the Company filed a motion for summary judgment, and the hearing on that motion took place on June 29, 2023.
−Removed: On August 3, 2023, the Northern District of California denied the Company’s motion for summary judgment.
−Removed: The trial date is set for December 4, 2023.
−Removed: At the time of filing of this Quarterly Report on Form 10-Q (this “Form 10-Q”), the loss contingency in this matter is remote and the Company does not anticipate the outcome of the matter to have a material impact on its financial position, results of operations, or cash flows.
+Added: In the opinion of management, any potential liabilities resulting from any current disputes would not have a material adverse effect on the Company’s unaudited interim condensed consolidated financial statements.
Line of Credit
1 unchanged sentence
The Company is permitted to borrow up to 70 % of the value of eligible securities held at the time the line of credit is accessed.
−Removed: The available line of credit as of September 30, 2023 was approximately $ 100.0 million with an available interest rate of 7.0 %.
+Added: The available line of credit as of March 30, 2024 was approximately $ 100 million with
+Added: an available interest rate of 7.1 %.
The credit agreement is available to the Company until such time that either party terminates the arrangement at their discretion.
2 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30,
−Removed: September 30,
Point-in-time
Total revenue
−Removed: See Note 14 for additional discussion of the Company’s disaggregated revenue in detail.
+Added: See Note 14 for additional discussion of the Company’s disaggregated revenue in detail.
Contract Liabilities
1 unchanged sentence
For contracts that have a duration of one year or less, these amounts are recorded as current deferred revenue in the Condensed Consolidated Balance Sheets.
−Removed: As of September 30, 2023 and December 31, 2022, the Company carried a long-term deferred revenue balance of $ 3,899 and $ 2,852 , respectively, in “Other non-current liabilities”
−Removed: on the Condensed Consolidated Balance Sheets.
+Added: As of March 30, 2024 and December 30, 2023, the Company carried a long-term deferred revenue balance of $ 2,529 and $ 2,462 , respectively, in “Other non-current liabilities” on the Condensed Consolidated Balance Sheets.
Changes in deferred revenue were as follows:
Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30,
−Removed: September 30,
Balance, beginning of the period
Deferral of revenue
−Removed: Recognition of deferred revenue
+Added: Recognition of current year deferred revenue
+Added: Recognition of prior period deferred revenue
Balance, end of the period
1 unchanged sentence
Restricted Stock Unit Activity
−Removed: A summary of the Company’s restricted stock unit activity with respect to the nine months ended September 30, 2023 is as follows:
+Added: A summary of the Company’s restricted stock unit activity with respect to the three months ended March 30, 2024 is as follows:
Number of Shares
2 unchanged sentences
Nonvested at December 30, 2023
−Removed: Nonvested at September 30, 2023
−Removed: Of the 608 nonvested shares outstanding at September 30, 2023, 515 are service-based RSUs and 93 are market-based PRSUs.
−Removed: The fair value of the Company’s service-based RSUs was calculated based on the fair market value of the Company’s stock at the date of grant.
−Removed: The fair value of the Company’s market-based PRSUs granted during fiscal years 2023 and 2022 was calculated using a Monte Carlo simulation model at the date of the grant, resulting in a weighted average grant-date fair value per share of $ 100.79 and $ 85.49 , respectively.
−Removed: As of September 30, 2023 and December 31 2022, there was $ 32,572 and $ 28,653 of total unrecognized compensation cost related to restricted stock units granted under the Company’s stock plans, respectively.
−Removed: That cost is expected to be recognized over a weighted average period of 1.6 years and 1.5 years for September 30, 2023 and December 31, 2022, respectively.
−Removed: Other Expense, Net
−Removed: Other expense, net, is comprised of the following:
+Added: Nonvested at March 30, 2024
+Added: Of the 536 nonvested shares outstanding at March 30, 2024, 454 are service-based RSUs and 82 are market-based PRSUs.
+Added: The fair value of the Company’s service-based RSUs was calculated based on the fair market value of the Company’s stock at the date of grant.
+Added: The fair value of the Company’s market-based PRSUs granted during fiscal years 2024 and 2023 was calculated
+Added: using a Monte Carlo simulation model at the date of the grant, resulting in a weighted average grant-date fair value per share of $ 251.51 and $ 100.79 , respectively.
+Added: As of March 30, 2024 and December 30 2023, there was $ 32,081 and $ 26,559 of total unrecognized compensation cost related to restricted stock units granted under the Company’s stock plans, respectively.
+Added: That cost is expected to be recognized over a weighted average period of 1.5 years and 1.4 years for March 30, 2024 and December 30, 2023, respectively.
+Added: Other Income (Expense), Net
+Added: Other income (expense), net, is comprised of the following:
Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30,
−Removed: September 30,
−Removed: Foreign currency exchange losses, net
−Removed: Total other expense, net
+Added: Foreign currency exchange gains (losses), net
+Added: Total other income (expense), net
The following table provides details of income taxes:
Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30,
−Removed: September 30,
Income before income taxes
1 unchanged sentence
Effective tax rate
−Removed: The income tax provision for the three and nine months ended September 30, 2023 was computed based on the Company’s annual forecast of profit by jurisdiction and forecasted effective tax rate for the year.
−Removed: The income tax provision for the nine months ended September 30, 2023 and October 1, 2022 reflected the impact of a change in U.S.
−Removed: tax law effective January 1, 2022, which requires the capitalization and amortization of research and development expenditures incurred after December 31, 2021.
−Removed: The decrease in the Company’s income tax provision for the three and nine months ended September 30, 2023 as compared to the three and nine months ended October 1, 2022 was primarily due to a decrease in quarterly and year-to-date earnings and
−Removed: an increase in the federal research and development tax credit, offset by a decrease in the Foreign Derived Intangible Income (“FDII”) deduction.
−Removed: The Company’s recorded effective tax rate for the periods presented is less than the U.S.
+Added: The income tax provision for the three months ended March 30, 2024 was computed based on the Company’s annual forecast of profit by jurisdiction and forecasted effective tax rate for the year.
+Added: The increase in the Company’s income tax provision for the three months ended March 30, 2024 as compared to the three months ended April 1, 2023 was primarily due to an increase in quarterly earnings, offset by an increase in the excess benefits associated with equity compensation.
+Added: The Company’s recorded effective tax rate for the periods presented is less than the U.S.
statutory rate primarily due to projected FDII deductions, federal research and development tax credits, and excess tax benefits associated with equity compensation.
2 unchanged sentences
The Company considers available evidence, both positive and negative, including forecasted earnings, in assessing its need for a valuation allowance.
−Removed: As a result of the Company’s analysis, it concluded that it is more likely than not that a portion of its deferred tax assets will not be realized.
+Added: As a result of the Company’s analysis, it concluded that it is more likely than not that a portion of its deferred tax assets will not be realized.
Therefore, the Company continues to provide a valuation allowance against certain deferred tax assets.
The Company continues to monitor available evidence and may reverse some or all of its remaining valuation allowance in future periods, if appropriate.
−Removed: The Company has a recorded valuation allowance against a certain portion of its deferred tax assets of $ 11,772 at September 30, 2023 and December 31, 2022.
+Added: The Company has a recorded valuation allowance against a certain portion of its deferred tax assets of $ 13,960 at March 30, 2024 and December 30, 2023.
+Added: The Organization for Economic Co-operation and Development (“OECD”) has been working on a Base Erosion and Profits Shifting project that, upon implementation, would change various aspects of the existing framework under which the Company’s tax obligations are determined in many of the countries in which we operate.
+Added: In this regard, the OECD has proposed policies aiming to modernize global tax systems, including a country-by-country 15% minimum effective tax rate (“Pillar Two”) for multinational companies.
+Added: Numerous countries have enacted, or are in the process of enacting, legislation to implement the Pillar Two model rules with a subset of the rules becoming effective during the current year, and the remaining rules becoming effective in later periods.
+Added: At this point in time, the Company does not expect any material tax impact associated with Pillar Two rules in the countries where it operates.
+Added: As these rules continue to evolve with new legislation and guidance, the Company will
+Added: continue to monitor and account for the enactment of Pillar Two and the potential impacts such rules may have on its effective tax rate and cash flows in future years.
Earnings Per Share
1 unchanged sentence
Restricted stock units, employee stock purchase grants and stock options are included in the calculation of diluted earnings per share, except when their effect would be anti-dilutive.
−Removed: The Company’s basic and diluted earnings per share amounts are as follows:
+Added: The Company’s basic and diluted earnings per share amounts are as follows:
Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30,
−Removed: September 30,
Basic earnings per share - weighted average shares
Effect of potential dilutive securities:
−Removed: Employee stock options, employee stock
−Removed: purchase grants and restricted stock units - dilutive shares
+Added: Restricted stock units and employee stock
+Added: purchase grants - dilutive shares
Diluted earnings per share - weighted average shares
1 unchanged sentence
Accumulated Other Comprehensive Loss
−Removed: The components of accumulated other comprehensive loss, net of tax, at September 30, 2023, as well as the activity for the nine months ended September 30, 2023, were as follows:
+Added: The components of accumulated other comprehensive loss, net of tax, at March 30, 2024, as well as the activity for the three months ended March 30, 2024, were as follows:
Foreign currency
−Removed: Net unrealized losses on
+Added: Net unrealized gains (losses) on
available-for-sale marketable
2 unchanged sentences
Balance at December 30, 2023
−Removed: Net current period other comprehensive income
+Added: Net current period other comprehensive loss
Reclassifications
−Removed: Balance at September 30, 2023
−Removed: For the nine months ended September 30, 2023, tax effects on net income of amounts recorded in other comprehensive loss for net unrealized gains on available-for-sale marketable securities and foreign currency translation adjustments was $ 407.
+Added: Balance at March 30, 2024
+Added: For the three months ended March 30, 2024, tax effects on net income of amounts recorded in other comprehensive loss for net unrealized gains on available-for-sale marketable securities and foreign currency translation adjustments was $ 181.
Segment Reporting and Geographic Information
3 unchanged sentences
Therefore, the Company has one reportable segment.
−Removed: The Company’s chief operating decision maker is the Chief Executive Officer (the “CEO”).
+Added: The Company’s chief operating decision maker is the Chief Executive Officer (the “CEO”).
The CEO allocates resources and assesses performance of the business and other activities at the reportable segment level.
1 unchanged sentence
Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30,
−Removed: September 30,
Systems and software
Total revenue
−Removed: The Company’s significant operations outside the United States include sales, service and application offices in Asia and Europe.
+Added: The Company’s significant operations outside the United States include sales, service and application offices in Asia and Europe.
For geographical revenue reporting, revenue is attributed to the geographic location to which the product is shipped.
1 unchanged sentence
Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30,
Revenue from third parties:
3 unchanged sentences
The following customers accounted for 10% or more of total revenue for the indicated periods:
−Removed: Nine Months Ended
−Removed: September 30,
+Added: Three Months Ended
Samsung Semiconductor
1 unchanged sentence
SK Hynix Inc.
−Removed: Yangtze Memory Technologies Co.
Share Repurchase Authorization
−Removed: In November 2020, the Onto Innovation Board of Directors approved a share repurchase authorization, which allows the Company to repurchase up to $ 100,000 worth of shares of its common stock.
+Added: In February 2024, the Onto Innovation Board of Directors approved a new share repurchase authorization, which allows the Company to repurchase up to $ 200,000 worth of shares of its common stock.
Repurchases may be made through both public market and private transactions from time to time with shares purchased being subsequently retired.
−Removed: During the three and nine month periods ended September 30, 2023, the Company repurchased 0 and 46 shares of its common stock, respectively.
−Removed: amount paid to repurchase the shares in excess of par value, including transaction costs, is recorded directly as a decrease to additional paid-in capital and accumulated earnings.
−Removed: At September 30, 2023, there was $ 31,577 available for future share repurchases under this share repurchase authorization.
+Added: Any amount paid to repurchase the shares in excess of par value, including transaction costs, would be recorded directly as a decrease to additional paid-in capital and accumulated earnings.
+Added: During the three month period ended March 30, 2024, no shares of the Company’s common stock were repurchased under the share repurchase authorization.
+Added: At March 30, 2024, there was $ 200,000 available for future share repurchases under this share repurchase authorization.
Restructuring
−Removed: The Company initiated a restructuring plan to streamline operations and align the Company’s cost structure with its business outlook for 2023.
−Removed: During the three and nine months ended September 30, 2023, restructuring costs of $ 0 and $ 3,226 were recorded in operating expenses for employee severance and $ 0 and $ 2,279 were recorded in cost of goods sold for inventory write-downs.
−Removed: All employee severance costs were paid during the nine-month period.
−Removed: The Company anticipates recording additional restructuring charges in its fourth fiscal quarter of 2023.
−Removed: Management’s Discussion and Analysis of Financial Condition and Results of Operations
−Removed: Forward-Looking Statements
−Removed: Certain statements in this Form 10-Q, or incorporated by reference in this Form 10-Q, of Onto Innovation Inc.
−Removed: (referred to in this Form 10-Q, together with its consolidated subsidiaries, unless otherwise specified or suggested by the context, as the “Company,”
−Removed: “Onto Innovation,”
−Removed: “we,”
−Removed: “our”
−Removed: or “us”) may be considered “forward-looking statements”
−Removed: or may be based on “forward-looking statements,”
−Removed: including, but not limited to, those concerning:
−Removed: our business momentum and future growth;
−Removed: technology development, product introduction and acceptance of our products and services;
−Removed: our manufacturing practices and ability to deliver both products and services consistent with our customers’
−Removed: demands and expectations and to strengthen our market position, including our ability to source components, materials, and equipment due to supply chain delays or shortages;
−Removed: our expectations of the semiconductor market outlook;
−Removed: future revenue, gross profits, research and development and engineering expenses, selling, general and administrative expenses, and cash requirements;
−Removed: the effects of political, economic, legal, and regulatory changes or conflicts on our global operations;
−Removed: the effects of natural disasters or public health emergencies, such as COVID-19, on the global economy and on our customers, suppliers, employees, and business;
−Removed: our dependence on certain significant customers and anticipated trends and developments in and management plans for our business and the markets in which we operate;
−Removed: our ability to be successful in managing our cost structure and cash expenditures and results of litigation.
−Removed: Statements contained or incorporated by reference in this Form 10-Q that are not purely historical are forward-looking statements and are subject to safe harbors under Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995.
−Removed: Forward-looking statements may be identified by words such as, but not limited to, “anticipate,”
−Removed: “believe,”
−Removed: “continue,”
−Removed: “estimate,”
−Removed: “expect,”
−Removed: “intend,”
−Removed: “plan,”
−Removed: “should,”
−Removed: “may,”
−Removed: “could,”
−Removed: “will,”
−Removed: “would,”
−Removed: “forecast,”
−Removed: “project”
−Removed: and words or phrases of similar meaning, as they relate to our management or us.
−Removed: Forward-looking statements contained herein reflect our current expectations, assumptions and projections with respect to future events and are subject to certain risks, uncertainties and assumptions, including, but not limited to, those identified in Part II, Item 1A.
−Removed: “Risk Factors”
−Removed: and elsewhere in this Form 10-Q.
−Removed: Actual results may differ materially and adversely from those included in such forward-looking statements.
−Removed: Forward-looking statements reflect our position as of the date of this Form 10-Q and we undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
−Removed: Critical Accounting Estimates
−Removed: The preparation of condensed consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States (“U.S.
−Removed: GAAP”) requires management to make judgments, assumptions and estimates that affect the amounts reported.
−Removed: Estimates and assumptions about future events and their effects cannot be determined with certainty.
−Removed: We base our estimates on historical experience and on various other assumptions believed to be applicable and reasonable under the circumstances.
−Removed: These estimates may change as new events occur, as additional information is obtained and as our operating environment changes.
−Removed: In addition, management is periodically faced with uncertainties, the outcomes of which are not within our control and will not be known for prolonged periods of time.
−Removed: Certain of these uncertainties are discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the “2022 Form 10-K”) filed with the Securities and Exchange Commission on February 24, 2023 in the Items entitled “Risk Factors”
−Removed: and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
−Removed: There have been no material changes in our critical accounting estimates from the information presented in Part II, Item 7.
−Removed: “Management’s Discussion and Analysis of Financial Condition and Results of Operations,”
−Removed: in the 2022 Form 10-K.
−Removed: For more information, please see our critical accounting estimates as previously disclosed in the 2022 Form 10-K and recent accounting pronouncements discussed in Note 1 to the Condensed Consolidated Financial Statements.
−Removed: Executive Summary
−Removed: We are a worldwide leader in the design, development, manufacture and support of metrology and inspection tools for the semiconductor industry, including process control tools that perform optical metrology on patterned and unpatterned wafers, wafer macro-defect inspection, including macro-inspection of both 2D and 3D wafer features, wafer substrate and panel substrate lithography systems, and process control analytical software.
−Removed: Our products are primarily used by silicon wafer manufacturers, semiconductor device fabricators, and advanced packaging manufacturers operating in the semiconductor market.
−Removed: Our products are also used for process control in a number of other specialty device manufacturing markets, including light emitting diodes (“LED”), vertical-cavity surface-emitting lasers (“VCSEL”), micro-electromechanical systems (“MEMS”), CMOS image sensors (“CIS”), silicon and compound semiconductor (SiC and GaN) power devices, analog devices, RF filters, data storage, and certain industrial and scientific applications.
−Removed: We provide process and yield management solutions used in bare silicon wafer production and wafer processing facilities, often referred to as “front-end”
−Removed: manufacturing, and advanced packaging of chips and test facilities, or “back-end”
−Removed: manufacturing, through a portfolio of standalone systems for optical metrology, macro-defect inspection, packaging lithography, as well as transparent and opaque thin film measurements.
−Removed: Our automated and integrated metrology systems measure critical dimensions, device structures, topography, shape, and various thin film compositions, including three-dimensional features and film thickness, as well as optical, electrical and material properties.
−Removed: Our primary areas of focus include products that provide critical yield-enhancing and actionable information, which is used by microelectronic device manufacturers to improve yield and time to market of their next-generation devices.
−Removed: Our systems feature sophisticated software and production-worthy automation.
−Removed: In addition, our advanced process control software portfolio includes powerful solutions for standalone tools, groups of tools, and factory-wide and enterprise-wide suites to enhance productivity and achieve significant cost savings.
−Removed: Our systems are backed by worldwide customer service and applications support.
−Removed: The semiconductor and electronics industries have been characterized by constant technological innovations.
−Removed: We believe that, over the long term, our customers will continue to invest in advanced technologies and new materials to enable smaller design rules and higher density applications that fuel demand for process control equipment.
−Removed: The following table summarizes certain key financial information for the periods indicated below (in thousands, except per share and percent data):
−Removed: Three Months Ended
−Removed: September 30,
−Removed: Gross profit as a percent of revenue
−Removed: Total operating expenses
−Removed: Diluted earnings per share
−Removed: In the fiscal quarter ended September 30, 2023 (the “September 2023 quarter”), revenue increased 9% compared to the fiscal quarter ended July 1, 2023 (the “July 2023 quarter”), primarily due to an increase in sales to memory customers in specialty device and advanced packaging applications, partially offset by a decrease in sales to foundry customers in advanced nodes applications.
−Removed: Gross profit as a percentage of revenue in the September 2023 quarter compared to the July 2023 quarter was primarily due to product mix.
−Removed: Operating expenses in the September 2023 quarter decreased by 4% compared to the July 2023 quarter primarily due to cost containment initiatives implemented earlier in the year.
−Removed: Our cash, cash equivalents and marketable securities balance increased to $629.7 million as of September 30, 2023 compared to $547.8 million as of December 31, 2022.
−Removed: This increase was primarily the result of $110.4 million of cash generated from operating activities, partially offset by cash used for capital expenditures of $20.1 million and $10.4 million for tax payments
−Removed: related to net share settlement of employee stock-based compensation plans.
−Removed: Employee headcount as of September 30, 2023 was approximately 1,516.
−Removed: We experienced supply chain constraints and inflationary pressures in 2022 and the first nine months of 2023, and although there have been improvements in supply chain performance, we expect some supply chain shortages as well as inflationary cost pressures to persist for the remainder of fiscal 2023 and into fiscal 2024.
−Removed: In 2022, the United States government implemented additional export regulations for U.S.
−Removed: semiconductor technology sold in China.
−Removed: We have applied for export licenses to continue doing business with our customers that are affected by the new export rules.
−Removed: However, the new export controls have resulted in lower net sales in China for the first nine months of fiscal 2023 compared to the same period last year.
−Removed: For a discussion of the risks related to our business and operations, see Part II, Item 1A –
−Removed: Risk Factors of this Form 10-Q.
−Removed: Results of Operations for the Three and Nine Months Ended September 30, 2023 and October 1, 2022
−Removed: Our revenue is primarily derived from the sale of our systems, software licensing, services and spare parts.
−Removed: Our revenue of $207.2 million decreased 18.5% for the three months ended September 30, 2023 as compared to the same period in 2022, in which revenue totaled $254.3 million.
−Removed: For the nine-month periods ended September 30, 2023 and October 1, 2022, our revenue totaled $597.0 million and $751.9 million, respectively, representing a year-over-year decrease of 20.6%
−Removed: The following table lists, for the periods indicated, the different sources of our revenue in dollars (thousands) and as percentages of our total revenue:
−Removed: Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30,
−Removed: September 30,
−Removed: Systems and software
−Removed: Total revenue
−Removed: Total systems and software revenue decreased $46.7 million and $150.7 million for the three and nine months ended September 30, 2023, respectively, as compared to the three and nine months ended October 1, 2022.
−Removed: These decreases were primarily due to a decrease in shipments of our metrology product lines to customers in advanced nodes applications.
−Removed: This decline was partially offset by an increase in shipments of out inspection and lithography product lines to customers in specialty devices and advanced packaging applications.
−Removed: The decrease in total parts and services revenue for the three and nine months ended September 30, 2023, as compared to the three and nine months ended October 1, 2022, was primarily due to lower factory utilization by several of our customers resulting in a decline in their spare parts requirements.
−Removed: Parts and services revenue is generated from part sales, maintenance service contracts, and system upgrades, as well as time and material billable service calls.
−Removed: Gross Profit.
−Removed: Our gross profit has been and will likely continue to be affected by a variety of factors, including manufacturing efficiencies, provision for excess and obsolete inventory, pricing by competitors or suppliers, new product introductions, production volume, customization and reconfiguration of systems, international and domestic sales mix, system and software product mix and parts and service margins.
−Removed: Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30,
−Removed: September 30,
−Removed: Gross profit as a percentage of revenue
−Removed: The decrease in gross profit as a percentage of revenue for the three month period ended September 30, 2023 as compared to the three month period ended October 1, 2022 was primarily due to product mix and higher production costs.
−Removed: The decrease in gross profit as a percentage of revenue for the nine month period ended September 30, 2023 as compared to the nine month period
−Removed: ended October 1, 2022 was primarily due to an increase of $1.9 million related to excess and obsolete inventory for older product lines.
−Removed: Operating Expenses.
−Removed: Our operating expenses consist of:
−Removed: Research and Development .
−Removed: We believe that it is critical to continue to make substantial investments in research and development to ensure the availability of innovative technology that meets the current and projected requirements of our customers’
−Removed: most advanced designs.
−Removed: We have maintained and intend to continue our commitment to investing in research and development in order to continue to offer new products and technologies.
−Removed: Accordingly, we devote a significant portion of our technical, management and financial resources to research and development programs.
−Removed: Research and development expenditures consist primarily of salaries and related expenses of employees engaged in research, design and development activities.
−Removed: They also include consulting fees, the cost of related supplies and legal costs to defend our patents.
−Removed: Our research and development expenses were $26.1 million and $80.4 million for the three and nine month periods ended September 30, 2023, respectively, as compared to $32.2 million and $84.1 million for the three and nine month periods ended October 1, 2022, respectively.
−Removed: The decrease in research and development expenses of $6.1 million for the three month period ended September 30, 2023, as compared to the three month period ended October 1, 2022, was primarily due to a decrease in acquisition costs of $4.6 million for the write-off of acquired in-process research and developments expenses and a decrease in compensation costs of $1.3 million on lower headcount.
−Removed: The decrease in research and development expenses of $3.7 million for the nine month period ended September 30, 2023, as compared to the nine month period ended October 1, 2022, was primarily due to a decrease in acquisition costs of $4.6 million for the write-off of acquired in-process research and developments expenses, partially offset by increases in depreciation expenses of $0.3 million and travel expenses of $0.3 million.
−Removed: Sales and Marketing .
−Removed: Sales and marketing expenses are primarily comprised of salaries, commissions and related costs for sales and marketing personnel, as well as other non-personnel related expenses.
−Removed: Our sales and marketing expenses were $14.8 million and $46.4 million for the three and nine month periods ended September 30, 2023, respectively, compared to $16.8 million and $49.3 million for the three and nine month periods ended October 1, 2022, respectively.
−Removed: The decrease in sales and marketing expenses of $2.0 million for the three month period ended September 30, 2023, as compared to the three month period ended October 1, 2022, was primarily due to decreases in compensations costs of $0.8 million on lower headcount, outside service expenses of $0.2 million and travel expenses of $0.2 million.
−Removed: The decrease in sales and marketing expenses of $2.9 million for the nine month period ended September 30, 2023, as compared to the nine month period ended October 1, 2022, was primarily due to decreases in compensation costs of $1.8 million on lower headcount, outside service expenses of $0.7 million and depreciation expense of $0.6 million, partially offset by an increase in travel expenses of $0.6 million.
−Removed: General and Administrative .
−Removed: General and administrative expenses are primarily comprised of salaries and related costs for corporate and administrative personnel, as well as other non-personnel related expenses.
−Removed: Our general and administrative expenses were $18.1 million and $56.1 million for the three and nine month periods ended September 30, 2023, respectively, as compared to $16.8 million and $51.6 million for the three and nine month periods ended October 1, 2022, respectively.
−Removed: The increase in general and administrative expenses of $1.3 million for the three month period ended September 30, 2023, as compared to the three month period ended October 1, 2022, was primarily due to increases in compensation costs of $0.6 million on higher headcount and depreciation expenses of $0.6 million.
−Removed: The increase in general and administrative expenses of $4.5 million for the nine month period ended September 30, 2023, as compared to the nine month period ended October 1, 2022, was primarily due to restructuring charges of $3.2 million for employee severance costs during the 2023 period, increases in facilities expenses of $1.7 million, and depreciation expenses of $1.4 million, partially offset by decreases in outside services expenses of $1.4 million.
−Removed: Amortization of Identifiable Intangible Assets .
−Removed: Amortization of identifiable intangible assets remained unchanged period over period.
−Removed: It was $13.8 million for the three month periods ended September 30, 2023 and October 1, 2022.
−Removed: For the nine month periods ended September 30, 2023 and October 1, 2022 amortization of identifiable intangible assets was $41.5 million.
−Removed: Interest income, net .
−Removed: Net interest income was $5.7 million and $13.9 million for the three and nine month periods ended September 30, 2023, respectively, as compared to $1.5 million and $2.6 million for the three and nine month periods ended
−Removed: October 1, 2022, respectively.
−Removed: The increases in net interest income for both the three and nine month periods ended September 30, 2023, as compared to the three and nine month periods ended October 1, 2022, were due to higher cash and marketable securities balances and higher interest rates during the 2023 period.
−Removed: Other expense, net .
−Removed: Other expense, net was $1.0 million and $3.0 million for the three and nine month periods ended September 30, 2023, respectively, as compared to $1.0 million and $2.0 million for the three and nine month periods ended October 1, 2022, respectively.
−Removed: The increase in other expense, net of $1.0 million for the nine month periods ended September 30, 2023, as compared to the nine month periods ended October 1, 2022, was primarily due to higher foreign exchange losses of $1.0 million.
−Removed: Income Taxes .
−Removed: We recorded an income tax provision of $2.8 million and $7.9 million for the three and nine month periods ended September 30, 2023, respectively, as compared to $7.6 million and $18.9 million for the three and nine month periods ended October 1, 2022, respectively.
−Removed: Our effective tax rate of 7% and 8% for the three and nine month periods ended September 30, 2023, differs from the statutory rate of 21%, primarily due to (i) research and development tax credits, (ii) the deduction related to foreign derived intangible income (“FDII”), and (iii) excess tax benefits associated with equity compensation.
−Removed: Our effective tax rate of 13% and 11% for the three and nine month periods ended October 1, 2022, differed from the statutory rate of 21%, primarily due to (i) research and development tax credits, (ii) the deduction related to FDII, and (iii) excess tax benefits associated with equity compensation.
−Removed: Our future effective income tax rate depends on various factors, such as possible changes in tax legislation, the geographic composition of our pre-tax income, the amount of our pre-tax income as business activities fluctuate, non-deductible expenses incurred in connection with business combinations, and research and development tax credits as a percentage of aggregate pre-tax income.
−Removed: We currently have a partial valuation allowance recorded for certain foreign and state loss and credit carryforwards where the realizability of such deferred tax assets is substantially in doubt.
−Removed: Each quarter we assess the likelihood that we will be able to recover our deferred tax assets primarily relating to state research and development credits.
−Removed: We consider available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for a valuation allowance.
−Removed: As a result of our analysis, we concluded that it is more likely than not that a portion of our net deferred tax assets will not be realized.
−Removed: Therefore, we continue to provide a valuation allowance against certain net deferred tax assets.
−Removed: We continue to monitor available evidence and may reverse some or all of the valuation allowance in future periods, if appropriate.
−Removed: Liquidity and Capital Resources
−Removed: At September 30, 2023, we had $629.7 million of cash, cash equivalents and marketable securities and $1,085.4 million in working capital.
−Removed: At December 31, 2022, we had $547.8 million of cash, cash equivalents and marketable securities and $974.3 million in working capital.
−Removed: Net cash and cash equivalents provided by operating activities for the nine months ended September 30, 2023 and October 1, 2022 were $110.4 million and $87.2 million, respectively.
−Removed: The net cash and cash equivalents provided by operating activities during the nine months ended September 30, 2023 resulted primarily from net income, adjusted to exclude the effect of non-cash operating charges, of $149.2 million, partially offset by a decrease in cash provided from operating assets and liabilities of $38.8 million, primarily due to a $33.5 million increase in prepaid expenses and other assets, a $31.4 million increase in inventories, and a $10.1 million decrease in accounts payable, partially offset by a $26.3 million decrease in accounts receivable, a $7.0 million increase in accrued and other liabilities, and a $2.9 million increase in net payable for income taxes.
−Removed: The net cash and cash equivalents provided by operating activities during the nine months ended October 1, 2022 resulted primarily from net income, adjusted to exclude the effect of non-cash operating charges of $214.2 million, partially offset by a decrease in cash provided from operating assets and liabilities of $127.0 million, primarily due to a $76.5 million increase in inventories, a $60.4 million increase in accounts receivable, a $16.9 million increase in prepaid expenses and other assets, and a $4.1 million increase in net payable for income taxes, partially offset by a $10.7 million increase in accounts payable, and a $20.2 million increase in accrued and other liabilities.
−Removed: Net cash and cash equivalents used in investing activities for the nine months ended September 30, 2023 and October 1, 2022 were $66.3 million and $29.2 million, respectively.
−Removed: During the nine months ended September 30, 2023, net cash and cash equivalents used in investing activities included purchases of marketable securities of $360.3 million and capital expenditures of $20.1 million, partially offset by proceeds from sales of marketable securities of $314.1 million.
−Removed: During the nine months ended October 1, 2022, net cash and cash equivalents used in investing activities included purchases of marketable securities of $289.5 million, capital expenditures of $9.8 million and purchase of intangible assets of $4.6 million, partially offset by proceeds from sales of marketable securities of $274.6 million.
−Removed: Net cash and cash equivalents used in financing activities for the nine months ended September 30, 2023 and October 1, 2022 were $9.1 million and $17.9 million, respectively.
−Removed: During the nine months ended September 30, 2023, financing activities used cash primarily for tax payments related to shares withheld to satisfy employee tax obligations in connection with the vesting of awards under share-based compensation plans of $10.4 million, repurchases of common stock of $3.2 million and payments related to contingent consideration for acquired business of $0.8 million, partially offset by proceeds from sales of shares through share-based compensation plans of $5.3 million.
−Removed: During the nine months ended October 1, 2022, financing activities used cash primarily for repurchases of common stock of $11.5 million, tax payments related to shares withheld to satisfy employee tax obligations in connection with the vesting of awards under share-based compensation plans of $8.6 million and payments related to contingent consideration for acquired business of $2.3 million, partially offset by proceeds from sales of shares through share-based compensation plans of $4.5 million.
−Removed: In November 2020, the Onto Innovation Board of Directors approved a share repurchase authorization, which allows the Company to repurchase up to $100 million worth of shares of its common stock.
−Removed: Repurchases may be made through both public market and private transactions from time to time with shares purchased being subsequently retired.
−Removed: During the three and nine months ended September 30, 2023, we repurchased 0 and 46 thousand shares of common stock, respectively, under this repurchase authorization and those shares were subsequently retired.
−Removed: As of September 30, 2023, there was $31.6 million available for future share repurchases under this share repurchase authorization.
−Removed: We have a credit agreement with a bank that provides for a line of credit that is secured by the marketable securities we have with the bank.
−Removed: We are permitted to borrow up to 70% of the value of eligible securities held at the time the line of credit is accessed.
−Removed: As of September 30, 2023, the available line of credit was approximately $100.0 million with an available interest rate of 7.0%.
−Removed: The credit agreement is available to us until such time that either party terminates the arrangement at its discretion.
−Removed: As of the date of this filing, we have not utilized the line of credit.
−Removed: Our future capital requirements will depend on many factors, including the timing and amount of our revenue and our investment decisions, which will affect our ability to generate additional cash.
−Removed: We expect that our existing cash, cash equivalents, marketable securities and availability under our line of credit will be sufficient to meet our anticipated cash requirements for working capital, capital expenditures and other cash needs for the next 12 months following the filing of this Form 10-Q.
−Removed: Thereafter, if cash generated from operations and financing activities is insufficient to satisfy our working capital requirements, we may seek additional funding through bank borrowings, sales of securities or other means.
−Removed: A reduction in or volatility with respect to our stock price or a general market downturn could materially impact our ability to sell securities on favorable terms or at all.
−Removed: There can be no assurance that we will be able to raise any such capital on terms acceptable to us or at all.
−Removed: Quantitative and Qualitati ve Disclosures About Market Risk
−Removed: There have been no material changes in market risk from the information presented in Part II, Item 7A.
−Removed: “Quantitative and Qualitative Disclosures About Market Risk,”
−Removed: in the 2022 Form 10-K.
+Added: From time to time, the Company approves restructuring plans, which includes workforce reductions, to streamline operations and align the Company’s cost structure with its business outlook.
+Added: Restructuring charges were $ 1,046 and $ 4,313 for the three months ended March 30, 2024 and April 1, 2023, respectively.
+Added: During the three months ended March 30, 2024, restructuring costs of $ 258 were recorded in operating expenses for employee severance and $ 788 were recorded in cost of goods sold for the streamlining of certain manufacturing activities.
+Added: During the three months ended April 1, 2023, restructuring costs of $ 2,034 were recorded in operating expense for employee severance and $ 2,279 was recorded in cost of goods sold for inventory write-downs primarily related to the exit of older product lines.
+Added: All employee severance costs were paid during the periods incurred.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.