What changed in this filing

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Item 9A. Controls and Procedures

2025-02-25 compared with 2024-02-26 · 267 added, 223 removed, 839 unchanged (37% of the section changed)

9 unchanged sentences

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f).

Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial

statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

Under the supervision and with the participation of our management, including our principal executive officer and principal

financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

Based on our evaluation, our management concluded that our internal control over financial reporting was effective as of December 28, 2024.

8 unchanged sentences

Rule 10b5-1 Plan Elections

The table below provides the details of all trading plans adopted or terminated by a director or officer during the Company’s last fiscal quarter.

Each of the trading plans is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act.

Officer's name

Adoption date

Expiration date

Aggregate number of securities to be sold

Chief Executive Officer

Vice President, General Counsel & Corporate Secretary

Disclosure Regarding Foreign Jurisdictions that Prevent Inspection.

During the fiscal quarter ended December 28, 2024, none of our directors or officers (as defined in Rule 16a-1 under the Exchange Act) adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 105b-1 trading arrangement” (as those terms are defined in Item 408 of Regulation S-K).

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

Certain information required by Part III is omitted from this Form 10-K because we expect to file a definitive proxy statement within one hundred twenty (120) days after the end of our fiscal year pursuant to Regulation 14A (the “Proxy Statement”) for our Annual Meeting of Stockholders currently scheduled for May 22, 2024, and the information included in the Proxy Statement is incorporated herein by reference, as specified below.

Certain information required by Part III is omitted from this Form 10-K because we expect to file a definitive proxy statement within one hundred twenty (120) days after the end of our fiscal year pursuant to Regulation 14A (the “Proxy Statement”) for our Annual Meeting of Stockholders currently scheduled for May 21, 2025, and such information included in the Proxy Statement is incorporated herein by reference, as specified below.

Directors, Executive Officers and Corporate Governance.

6 unchanged sentences

We will post on our website any amendment to or waiver from a provision of our code of business conduct and ethics as may be required, and within the time period specified, by applicable SEC rules.

We have adopted an insider trading policy governing the purchase, sale and other dispositions of our securities by our directors, officers and employees that we believe is reasonably designed to promote compliance with insider trading laws, rules and regulations, and any applicable listing standards.

Executive Compensation.

7 unchanged sentences

Ratification of Appointment of Independent Registered Public Accounting Firm” in the Proxy Statement.

Exhibits and Financial Statement Schedule.

Exhibits and Financial Statement Schedules.

(a) The following documents are filed as part of this Form 10-K:

3 unchanged sentences

Financial Statement Schedule

See Index to financial statements on page F-1 of this report.

See Index to financial statements on page 47 of this report.

Exhibits are as set forth in the “Exhibit Index”, provided below.

11 unchanged sentences

February 25, 2020

Rudolph Technologies, Inc.

2018 Stock Plan

Form of Employee Restricted Stock Unit Purchase Agreement pursuant to the Rudolph Technologies, Inc.

2018 Stock Plan

August 2, 2018

Onto Innovation Inc.

2020 Stock Plan

2020 Stock Plan, as amended and restated

August 8, 2024

Form of Employee Stock Option Agreement for usage under the Onto Innovation Inc.

2020 Stock Plan

2020 Stock Plan, as amended and restated

Form of Director Stock Option Agreement for usage under the Onto Innovation Inc.

2020 Stock Plan

2020 Stock Plan, as amended and restated

Form of Executive Restricted Stock Unit Grant Agreement for usage under the Onto Innovation Inc.

2020 Stock Plan, as amended and restated

Form of Executive Performance Stock Unit Grant Agreement for usage under the Onto Innovation Inc.

2020 Stock Plan, as amended and restated

Form of Employee Restricted Stock Unit Agreement for usage under the Onto Innovation Inc.

2020 Stock Plan

2020 Stock Plan, as amended and restated

February 26, 2024

Form of Director Restricted Stock Unit Purchase Agreement for usage under the Onto Innovation Inc.

2020 Stock Plan

2020 Stock Plan, as amended and restated

February 26, 2024

Form of Employee Performance Stock Unit Purchase Agreement for usage under the Onto Innovation Inc.

2020 Stock Plan

2020 Stock Plan, as amended and restated

August 5, 2021

Form of Employee Incentive Restricted Stock Unit Purchase Agreement for usage under the Onto Innovation Inc.

2020 Stock Plan

2020 Stock Plan, as amended and restated

November 4, 2021

15 unchanged sentences

Offer Letter to Mark Slicer, dated April 1, 2022, by and between Mark Slicer and Onto Innovation Inc.

Offer Letter to Ramil Yaldaei, dated April 25, 2023, by and between Ramil Yaldaei and Onto Innovation Inc.

Offer Letter to Srinivas Vedula, dated August 30, 2021

Form of Executive Change in Control Agreement

February 24, 2023

Onto Innovation Inc.

Insider Trading Policy

Subsidiaries.

8 unchanged sentences

Incentive Compensation Recovery Policy

February 26, 2024

Inline XBRL Instance Document

12 unchanged sentences

Reports of Independent Registered Public Accounting Firm (PCAOB ID Number 42 )

Consolidated Statements of Operations for the years ended December 30, 2023, December 31, 2022 and

January 1, 2022

Consolidated Statements of Comprehensive Income for the years ended December 30, 2023, December 31, 2022 and January 1, 2022

Consolidated Statements of Operations for the years ended December 28, 2024, December 30, 2023 and December 31, 2022

Consolidated Statements of Comprehensive Income for the years ended December 28, 2024, December 30, 2023 and December 31, 2022

Consolidated Balance Sheets as of December 28, 2024 and December 30, 2023

Consolidated Statements of Cash Flows for the years ended December 30, 2023, December 31, 2022 and

January 1, 2022

Consolidated Statements of Stockholders’ Equity for the years ended December 30, 2023, December 31, 2022 and January 1, 2022

Consolidated Statements of Cash Flows for the years ended December 28, 2024, December 30, 2023 and December 31, 2022

Consolidated Statements of Stockholders’ Equity for the years ended December 28, 2024, December 30, 2023 and December 31, 2022

Notes to the Consolidated Financial Statements

1 unchanged sentence

Schedule of Valuation and Qualifying Accounts

Form 10-K Summary .

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Onto Innovation Inc.

To the Shareholders and the Board of Directors of Onto Innovation Inc.

Opinion on the Financial Statements

18 unchanged sentences

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account s or disclosure to which it relates.

Reserve for Excess and Obsolete Inventory

Description of

Description of the Matter

As described in Notes 2 and 8 to the consolidated financial statements, the Company records inventory net of a reserve for excess and obsolete inventory resulting in net inventories of $287.0 million as of December 28, 2024.

1 unchanged sentence

As described in Note 2 to the consolidated financial statements, the Company maintains reserves for excess and obsolete inventory equal to the difference between the cost of inventory and its estimated net realizable value based upon assumptions about historical and future demand for the Company’s products and market conditions.

Auditing management’s estimate of the excess and obsolete inventory reserve was subjective and required significant judgment as the excess and obsolete inventory reserve is sensitive to changes in the Company’s operations and assumptions used to estimate the reserve including management’s assumptions with regards to product life-cycles, product demand and market conditions, which includes historical usage,

expected future usage, on-hand quantities of individual materials, and anticipated engineering design changes or advancements.

Addressed the

Matter in Our

operations and assumptions used to estimate the reserve including management’s assumptions with regards to product life-cycles, product demand and market conditions, which includes historical usage, expected future usage, on-hand quantities of individual materials, and anticipated engineering design changes or advancements.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s excess and obsolete inventory reserve process, including those over the validity and reasonableness of the data and assumptions used in estimating the excess and obsolete inventory reserve.

6 unchanged sentences

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Onto Innovation Inc.

To the Shareholders and the Board of Directors of Onto Innovation Inc.

Opinion on Internal Control Over Financial Reporting

93 unchanged sentences

Write-off of acquired in-process research and development

Acquired inventory step-up amortization

Provision for inventory valuation

18 unchanged sentences

Issuance of shares through share-based compensation plans

Net cash and cash equivalents (used in) provided by financing activities

Net cash and cash equivalents used in financing activities

Effect of exchange rate changes on cash and cash equivalents

8 unchanged sentences

For the years ended December 28, 2024,

December 31, 2022 and January 1, 2022

December 30, 2023 and December 31, 2022

(In thousands)

2 unchanged sentences

Income / (Loss)

Balance at December 26, 2020

Balance at January 1, 2022

Issuance of shares through share-

based compensation plans, net

Repurchase of common stock

Share-based compensation

2 unchanged sentences

Unrealized loss on investments

Balance at January 1, 2022

Balance at December 31, 2022

Issuance of shares through share-

4 unchanged sentences

Currency translation

Unrealized loss on investments

Unrealized gain on investments

Balance at December 30, 2023

5 unchanged sentences

Currency translation

Unrealized gain on investments

Unrealized loss on investments

Balance at December 28, 2024

2 unchanged sentences

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share data)

Organization and Nature of Operations:

11 unchanged sentences

All intercompany accounts and transactions have been eliminated.

The fiscal year of 2023 began on January 1, 2023 and ended December 30, 2023.

The fiscal year of 2022 began on January 2, 2022 and ended December 31, 2022.

The fiscal year of 2021 began on December 27, 2020 and ended January 1, 2022.

The Company operates on a 52- or 53-week fiscal year ending on the Saturday closest to December 31.

The fiscal year of 2024 was a 52-week fiscal year that began on December 31, 2023 and ended December 28, 2024.

The fiscal year of 2023 was a 52-week fiscal year that began on January 1, 2023 and ended December 30, 2023.

The fiscal year of 2022 was a 52-week fiscal year that began on January 2, 2022 and ended December 31, 2022.

Segment Reporting.

The Company is organized and operates as one reportable segment, the design, development, manufacture and support of high-performance control metrology, defect inspection, lithography and data analysis systems used by microelectronics device manufacturers.

The Company’s chief operating decision maker, the Chief Executive Officer, reviews financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance.

For additional information on the Company’s segment reporting, see Note 15 of Notes to the Consolidated Financial Statements.

Revenue Recognition .

12 unchanged sentences

The Company provides for the estimated cost of product warranties at the time revenue is recognized.

Depending on the terms of the systems arrangement, the Company may also defer the recognition of a portion of the consideration expected to be received because the Company has to satisfy a future obligation (e.g., installation and extended warranties).

The Company uses an observable price to determine the standalone selling price for separate performance obligations or a cost-plus margin approach when one is not available.

ONTO INNOVATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except per share data)

The Company uses an observable price to determine the standalone selling price for separate performance obligations or a cost-plus margin approach when one is not available.

Revenue from software licenses provides the customer with a right to use the software as it exists when made available to the customer.

23 unchanged sentences

Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results.

Use of Estimates.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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.

For additional information on the Company’s business combinations, see Note 3 of these Notes to the Consolidated Financial Statements.

ONTO INNOVATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except per share data)

recoverability of deferred tax assets, liabilities for product warranty, contingencies, including litigation reserves and share-based payments and liabilities for tax uncertainties.

Use of Estimates.

Significant estimates made by management include the allowance for credit losses, 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, liabilities for product warranty, contingencies, including litigation reserves and share-based payments and liabilities for tax uncertainties.

Actual results could differ from those estimates.

These estimates and assumptions are based on historical experience and on various other factors which the Company believes to be reasonable under the circumstances.

The Company may engage third-party valuation specialists to assist with estimates related to the valuation of financial instruments, assets and stock awards associated with various contractual arrangements.

Such estimates often require the selection of appropriate valuation methodologies and significant judgment.

28 unchanged sentences

When recorded, reserves are intended to reduce the carrying value of the Company’s inventory to its net realizable value.

If actual demand for the Company’s products deteriorates, or market conditions are less favorable than those that the Company projects, additional reserves may be required.

If actual demand for

ONTO INNOVATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

the Company’s products deteriorates, or market conditions are less favorable than those that the Company projects, additional reserves may be required.

Property, Plant and Equipment.

1 unchanged sentence

Depreciation of property, plant and equipment is computed using the straight-line method over the estimated useful lives of the assets, which are five to twenty-two years for buildings, three to ten years for machinery and equipment, three to ten years for furniture and fixtures, three years for computer equipment, and three to seven years for software.

Leasehold improvements are amortized using the straight-line

ONTO INNOVATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except per share data)

method over the lesser of the lease term or the estimated useful life of the related asset.

Leasehold improvements are amortized using the straight-line method over the lesser of the lease term or the estimated useful life of the related asset.

Repairs and maintenance costs are expensed as incurred and major renewals and betterments are capitalized.

32 unchanged sentences

The Company actively monitors its customers’ financial strength to reduce the risk of loss.

ONTO INNOVATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Company generally provides a warranty on its products for a period of twelve to fourteen months against defects in material and workmanship.

2 unchanged sentences

If actual product failure rates, material usage, labor or replacement costs differ from the Company’s estimates, revisions to the estimated warranty obligations would be required.

The warranty accrual represents the best estimate of the amount necessary to settle future and existing

ONTO INNOVATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except per share data)

claims on products sold as of the balance sheet date.

The warranty accrual represents the best estimate of the amount necessary to settle future and existing claims on products sold as of the balance sheet date.

The Company periodically assesses the adequacy of its recorded warranty reserve and adjusts the amounts in accordance with changes in these factors.

8 unchanged sentences

dollars using average rates in effect for the period.

The resulting translation adjustments are recorded as cumulative translation adjustments and are recorded directly as a separate component of stockholders’ equity under the caption, “Accumulated other comprehensive loss.” The Company had accumulated exchange losses resulting from the translation of foreign operation financial statements of $ 8,664 and $ 7,115 as of December 30, 2023 and December 31, 2022, respectively.

The resulting translation adjustments are recorded as cumulative translation adjustments and are recorded directly as a separate component of stockholders’ equity under the caption, “Accumulated other comprehensive loss.” The Company had accumulated exchange losses resulting from the translation of foreign operation financial state ments of $ 14.5 million and $ 8.7 million as of December 28, 2024 and December 30, 2023 , respectively.

Share-based Compensation .

10 unchanged sentences

The Company does not believe that it is exposed to more than a nominal amount of credit risk in its foreign currency hedges, as counterparties are large, global and well-capitalized financial institutions.

The Company’s exposures are in liquid currencies (Japanese yen, euros, Korean won, Taiwanese dollars, Chinese renminbi, Singapore dollars and Israeli shekel), so there is minimal risk that appropriate derivatives to maintain the Company’s hedging program would not be available in the future.

The Company’s exposures are in liquid currencies (Japanese yen, euros, Korean won, Taiwanese dollars, Chinese renminbi and Singapore dollars), so there is minimal risk that appropriate derivatives to maintain the Company’s hedging program would not be available in the future.

To hedge foreign currency risks, the Company uses foreign currency exchange forward contracts, where possible and prudent.

2 unchanged sentences

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except per share data)

The dollar equivalent of the U.S.

dollar forward contracts and related fair values as of December 28, 2024 and December 30, 2023 were as follows:

(in thousands)

Notional amount

Fair value of liability

During the year ended December 30, 2023, the Company recognized a gain of $ 263 on maturities of forward contracts.

During the years ended December 31, 2022 and January 1, 2022, the Company recognized losses of $ 3,487 and $ 1,650 on maturities of forward contracts, respectively.

The aggregate notional amounts of matured contracts were $ 319,370 , $ 365,985 and $ 420,460 for 2023, 2022 and 2021, respectively.

Fair value of (asset) liability

During the years ended December 28, 2024 and December 31, 2022, the Company recognized losses of $ 1.1 million and $ 3.5 million on maturities of forward contracts, respectively.

During the year ended December 30, 2023, the Company recognized a gain of $ 0.3 million on maturities of forward contracts.

The aggregate notional amounts of matured contracts were $ 423.4 million, $ 319.4 million and $ 366.0 million for 2024, 2023 and 2022, respectively.

Contingencies and Litigation .

7 unchanged sentences

Recently Adopted or Effective

The Company has not adopted any new accounting standards during the 2023 fiscal year that have a material impact on the Company’s Condensed Consolidated Financial Statements.

Updates Not Yet Effective

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting (Topic 280):

2 unchanged sentences

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.

The Company is currently in the process of evaluating the impact of adoption on its Consolidated Financial Statements.

The Company adopted the new standard in fiscal year 2024 for annual and retrospective reporting periods with all interim disclosures to begin in the first quarter of fiscal year 2025.

Refer to Note 15 for additional discussion regarding the Company’s segment reporting.

Updates Not Yet Effective

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740):

2 unchanged sentences

The guidance is effective for financial statements issued for annual periods beginning after December 15, 2024, with early adoption permitted.

The Company is required to adopt this standard prospectively in fiscal year 2025 for the annual reporting period ending December 27, 2025.

The Company is currently in the process of evaluating the impact of adoption on its Consolidated Financial Statements.

The Company is required to adopt this standard prospectively in fiscal year 2025 for the annual reporting period ending January 3, 2026.

The Company does not expect the amendment to have a material impact on its Consolidated Financial Statements upon adoption.

In November 2024, the FASB issued ASU 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures” (Subtopic 220-40) which requires additional disclosure of certain costs and expenses, including inventory purchases, employee compensation, selling expense and depreciation expense within the notes to financial statements.

The guidance is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the impact that the updated standard will have on its financial statements and related disclosures.

ONTO INNOVATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Business Combination:

Lumina Instruments Inc.

During the fourth quarter of 2024, the Company acquired Lumina Instruments Inc.

(“Lumina”), to strengthen Onto Innovation’s inspection portfolio through the addition of Lumina’s highly differentiated laser based optical defect inspection technology .

The Company paid $ 25.0 million in cash to acquire Lumina.

The acquisition has been accounted for using the acquisition method of accounting in accordance with FASB Accounting Standards Codification (“ASC”) Topic 805, “Business Combinations.” Under the acquisition method of accounting, the total purchase consideration of the acquisition is allocated to the tangible assets and identifiable intangible assets acquired based on their relative fair values.

The excess of the purchase consideration over the net tangible and identifiable intangible assets is recorded as goodwill, the amount of which represents the expected benefits to the Company of future technology and the knowledgeable and experienced employees who joined the Company.

The following table summarizes the purchase consideration and estimated fair values of the assets acquired and liabilities assumed:

At Acquisition Date

(in thousands)

Cash and cash equivalents

Accounts receivable

Prepaid expenses and other current assets

Identifiable intangible assets

Total assets acquired

Accounts payable

Accrued liabilities

Deferred tax liabilities

Net assets acquired

Total purchase consideration

Fair Value Measurements:

3 unchanged sentences

The carrying value of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximates fair value because of the short-term maturity of these instruments.

ONTO INNOVATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except per share data)

Fair Value Hierarchy

5 unchanged sentences

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.

ONTO INNOVATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table provides the assets and liabilities carried at fair value measured on a recurring basis at December 28, 2024 and December 30, 2023:

2 unchanged sentences

Inputs (Level 2)

(in thousands)

Available-for-sale debt securities:

Government notes and bonds

Asset-backed securities

Certificates of deposit

2 unchanged sentences

Foreign currency forward contracts

Total liabilities

7 unchanged sentences

Holding Losses

(in thousands)

December 28, 2024

6 unchanged sentences

Government notes and bonds

Asset-backed securities

Certificates of deposit

4 unchanged sentences

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except per share data)

The amortized cost and estimated fair value of marketable securities classified by the maturity date listed on the security, regardless of the Consolidated Balance Sheet classification, is as follows at December 28, 2024 and December 30, 2023:

1 unchanged sentence

December 30, 2023

(in thousands)

Due within one year

8 unchanged sentences

For Greater Than 12 Months

(in thousands)

December 28, 2024

6 unchanged sentences

Government notes and bonds

Asset-backed securities

Certificates of deposit

8 unchanged sentences

The Company performed its annual assessment in the fourth quarter of fiscal 2024 and concluded that no impairment charge was required.

There were no changes to the carrying amount of goodwill for the years ended December 30, 2023 and December 31, 2022.

ONTO INNOVATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except per share data)

The changes in the carrying amount of goodwill are as follows:

(in thousands)

Balance, beginning of the period

Acquired business

Balance, end of the period

The $14.2 million of goodwill acquired in 2024 resulted from the purchase of Lumina Instruments, Inc.

See Note 3, “Business Combination,” for further details.

Purchased Intangible Assets

2 unchanged sentences

Accumulated Amortization

(in thousands)

December 28, 2024

10 unchanged sentences

Total identifiable intangible assets

Intangible asset amortization expense amounted to $ 54,822 , $ 55,284 and $ 51,366 for the years ended December 30, 2023, December 31, 2022 and January 1, 2022, respectively.

Assuming no change in the gross carrying value of identifiable intangible assets and estimated lives, estimated amortization expenses are $ 49,137 for 2024, $ 32,587 for 2025, $ 31,394 for 2026, $ 23,173 for 2027 and $ 12,288 for 2028.

Intangible asset amortization expense amounted to $ 49.4 million, $ 54.8 million and $ 55.3 million for the years ended December 28, 2024, December 30, 2023 and December 31, 2022, respectively.

Assuming no change in the gross carrying value of identifiable intangible assets and estimated lives, estimated amortization expenses are $ 33.8 million for 2025, $ 32.6 million for 2026, $ 24.4 million for 2027, $ 13.5 million for 2028, and $ 6.2 million for 2029.

Leasing Arrangements:

6 unchanged sentences

Leases with a term of one year or less are not recorded on the Consolidated Balance Sheets and lease expense for these leases is recognized on a straight-line basis over the lease term.

ONTO INNOVATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Lease costs for operating leases were $ 6.4 million and $ 6.5 million for the years ended December 28, 2024 and December 30, 2023, respectively.

Operating lease costs are generally recognized over the lease term.

The Company uses its estimated incremental borrowing rate in determining the present value of lease payments considering the term of the lease, which is derived from information available at the lease commencement date, giving consideration to publicly available data for instruments with similar characteristics.

The Company accounts for the lease and non-lease components as a single lease component.

Lease costs for operating leases were $ 6,527 and $ 6,368 for the years ended December 30, 2023 and December 31, 2022, respectively.

Operating lease costs are generally recognized over the lease term.

The Company elected the practical expedient to not provide comparable presentation for periods prior to adoption.

Details of the Company’s operating leases are as follows:

Cash Flow Information

Lease term and discount rate

Weighted average remaining lease term in years

Weighted average discount rate

Supplemental cash flows information related to leases was as follows:

(in thousands)

Cash paid for operating lease liabilities

Right-of-use assets obtained in exchange for operating lease liabilities

ONTO INNOVATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except per share data)

Operating Lease Information

Weighted average remaining lease term

Weighted average discount rate

As of December 28, 2024, there was an insignificant amount of commitments for operating leases that have not yet commenced.

The reconciliation of the maturities of operating leases to the lease liabilities recorded on the Consolidated Balance Sheet as of December 28, 2024 is as follows:

Operating Lease

(in thousands)

Total undiscounted operating lease payments

3 unchanged sentences

Inventories are comprised of the following:

(in thousands)

Work-in-process

1 unchanged sentence

Total inventories

ONTO INNOVATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Property, Plant and Equipment

Property, plant and equipment, net, is comprised of the following:

(in thousands)

Land and building

3 unchanged sentences

Leasehold improvements

Total property, plant and equipment, gross

Accumulated depreciation

Total property, plant and equipment, net

ONTO INNOVATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except per share data)

Other assets is comprised of the following:

(in thousands)

Operating lease right-of-use assets

2 unchanged sentences

Accrued liabilities is comprised of the following:

(in thousands)

Payroll and related expenses

2 unchanged sentences

Other current liabilities is comprised of the following:

(in thousands)

Customer deposits

4 unchanged sentences

Total other current liabilities

ONTO INNOVATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Other non-current liabilities

Other non-current liabilities is comprised of the following:

(in thousands)

Non-current operating lease obligations

3 unchanged sentences

Commitments and Contingencies:

The Company maintains arrangements under which eligible accounts receivable in Japan are sold without recourse to unrelated third-party financial institutions.

The Company sold $ 29,539 of receivables during the year ended December 30, 2023.

There were no material gains or losses on the sale of such receivables.

There were no amounts due from such third-party financial institutions at December 30, 2023.

ONTO INNOVATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except per share data)

Intellectual Property Indemnification Obligations

10 unchanged sentences

Changes in the Company’s warranty reserves are as follows:

(in thousands)

Balance, beginning of the period

Balance, end of the period

Warranty reserves are reported in the 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.

The following reflects an overview of the material developments with regard to the Company’s pending material legal proceedings.

Optical Solutions Inc.

Nanometrics Incorporated (Case No.

18-cv-00417-BLF):

On August 2, 2017, Nanometrics was named as defendant in a complaint filed in New Hampshire Superior Court (the “Complaint”).

The Complaint, brought by Optical Solutions, Inc.

(“OSI”), alleged claims arising from a purported exclusive purchase contract between OSI and Nanometrics pertaining to certain products.

The relief sought was the award of damages in an amount to be proven at trial, attorney’s fees and costs as well as other relief the court deems just and proper.

On September 18, 2017, Nanometrics removed the action to the United States District Court for the District of New Hampshire (the “District of New Hampshire”).

On September 25, 2017, Nanometrics moved to transfer the Complaint to the United States District Court for the Northern District of California (the “Northern District of California”).

On December 20, 2017, Nanometrics filed its 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 relief sought was the 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 as well as other relief the court deems just and proper.

Nanometrics’ complaint was later removed by OSI to the Northern District of California.

On May 29, 2018, the District of New Hampshire issued an order granting Nanometrics’ motion to transfer the Complaint to the Northern District of California and denying Nanometrics’ motion to dismiss the Complaint without prejudice.

On June 14, 2018, the Complaint was consolidated with Nanometrics’ complaint against OSI.

On August 9, 2018, OSI filed an Amended Complaint.

On September 19, 2018, Nanometrics filed a motion to dismiss OSI’s Amended Complaint for failure to state a claim.

Nanometrics’ motion to dismiss was heard on February 28, 2019.

On March 5, 2019, the Northern District of California granted Nanometrics’ motion to dismiss with leave to amend.

OSI filed a Second Amended Complaint on March 29, 2019.

Nanometrics filed a motion to dismiss OSI’s Second Amended Complaint on May 31, 2019.

In October 2019, Nanometrics was renamed Onto Innovation Inc.

as a result of the Merger.

Thereafter, the Company’s second motion to dismiss was heard on November 14, 2019.

On November 26, 2019, the Northern District of California granted the Company’s motion to dismiss with leave to amend.

OSI filed a Third Amended Complaint on January 21, 2020.

On March 2, 2020, the Company filed a motion to dismiss OSI’s Third Amended Complaint and a hearing on the motion was held on June 11, 2020.

On June 23, 2020, the Northern District of California granted the Company’s motion to dismiss with prejudice with regard to two claims asserted by OSI and dismissed two other claims asserted by OSI with leave to amend.

Thereafter, on July 7, 2020, OSI filed a Fourth Amended Complaint.

On August 14, 2020, the Company filed a motion to dismiss with regard to one of the two remaining claims.

We do not believe that any current legal matters will have a material adverse effect on our financial position, results of operations or cash flows.

Open and Committed Purchase Orders

As of December 28, 2024, the Company has open and committed purchase orders of $ 438.2 million, of which $ 243.9 million is for less than one year.

ONTO INNOVATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except per share data)

December 1, 2020, the Northern District of California denied this final motion to dismiss and as a result the Company filed its Answer in this matter on December 22, 2020.

Discovery was closed and a trial date set for December 2023.

Prior to trial, however, the parties resolved all outstanding claims between them in a confidential out-of-court settlement during fiscal 2023.

The settlement did not have a material impact on the Company’s financial position, results of operations or cash flows.

Open and Committed Purchase Orders

As of December 30, 2023, the Company has open and committed purchase orders of $ 437,105 , of which $ 426,087 is for less than one year.

Line of Credit

The Company has a credit agreement with a bank that provides for a line of credit which is secured by the marketable securities the Company has with the bank.

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.

The available line of credit as of December 30, 2023 was approximately $ 100,000 with an available interest rate of 7.0 %.

The Company has a credit agreement with a bank that provides for a variable-rate line of credit which is secured by the marketable securities the Company has with the bank.

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, up to a maximum of $100 million.

The available line of credit as of December 28, 2024 was approximately $ 100 million with an available interest rate of 6.2 %.

The credit agreement is available to the Company until such time that either party terminates the arrangement at their discretion.

The Company has not utilized the line of credit to date.

As of the date of this filing, the Company has not utilized the line of credit.

The following table represents a disaggregation of revenue by timing of revenue:

(in thousands)

Point-in-time

1 unchanged sentence

See Note 15 of the Notes to the Consolidated Financial Statements for additional discussion of the Company’s disaggregated revenue in detail.

Contract Liabilities

The Company records contract liabilities when the customer has been billed in advance of the Company completing its performance obligations primarily related to service contracts and installation.

For contracts that have a duration of one year or less, these amounts are recorded as current deferred revenue in the Consolidated Balance Sheets.

As of December 30, 2023 and December 31, 2022, the Company carried a long-term deferred revenue balance of $ 2,462 and $ 2,852 , respectively, in “other non-current liabilities” on the Consolidated Balance Sheets.

Contract Assets and Contract Liabilities

Contract assets consist of amounts we have not invoiced but have completed the related performance obligation.

These amounts generally arise from variances between the contractual payment terms and the transaction price assigned to the open performance obligations (e.g., we have recognized revenue in an amount greater than the amount that is billable under the contract).

The contract assets amounts are recorded in “Accounts receivable” in the Consolidated Balance Sheets.

As of December 28, 2024 and December 30, 2023, the Company had contract assets of $ 10.1 million and $ 8.0 million, respectively.

The Company records contract liabilities when the customer has been billed in advance of the Company completing its performance obligations primarily with respect to liabilities related to service contracts and installation.

For contracts that have a duration of one year or less, these amounts are recorded as “Deferred revenue” in the Consolidated Balance Sheets.

For contracts with a duration longer than one year, these amounts are recorded in “Other non-current liabilities” in the Consolidated Balance Sheets.

As of December 28, 2024 and December 30, 2023, the Company carried a long-term deferred revenue balance of $ 4.0 million and $ 2.5 million, respectively.

Changes in deferred revenue were as follows:

(in thousands)

Balance, beginning of the period

Deferral of revenue

Revenue recognized

Recognition of current year deferred revenue

Recognition of prior period deferred revenue

Balance, ending of the period

1 unchanged sentence

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except per share data)

Share-Based Compensation and Employee Benefit Plans:

3 unchanged sentences

Onto Innovation Inc.

2020 Stock Plan (the “2020 Plan”) .

The 2020 Plan provides for the grant of 3,744 stock options and other stock awards to employees, directors and consultants at an exercise price equal to the fair market value of the common stock on the date of grant.

2020 Stock Plan, as amended and restated (the “2020 Plan”) .

The 2020 Plan provides for the grant of 3.7 million stock options and other stock awards to employees, directors and consultants at an exercise price equal to the fair market value of the common stock on the date of grant.

Options granted under the 2020 Plan typically grade vest over a three-year period and expire ten years from the date of grant.

2 unchanged sentences

Restricted stock units (“RSUs”) granted to employees have time based or performance-based vesting.

As of December 30, 2023, there were 2,868 shares of common stock available for issuance pursuant to future grants under the 2020 Plan.

As of December 28, 2024, there were 2.7 million shares of common stock available for issuance pursuant to future grants under the 2020 Plan.

Onto Innovation Inc.

2 unchanged sentences

The price the employee pays for each share of stock is 85 % of the lesser of the fair market value of Company common stock at the beginning or the end of the applicable six-month purchase period.

The 2020 ESPP is intended to qualify under Section 423 of the Internal Revenue Code and is a compensatory plan as defined by FASB ASC 718, “Stock Compensation.” Through the Company’s employee stock purchase plans, employees purchased 91 , 142 and 242 shares during the twelve months ended December 30, 2023, December 31, 2022 and January 1, 2022, respectively.

As of December 30, 2023 and December 31, 2022, there were 1,025 and 1,116 , shares available for issuance under the Company’s employee stock purchase plan, respectively.

The following table reflects share-based compensation expense by type of award:

Share-based compensation expense:

Restricted stock units, including all performance and market

Stock options and employee stock purchase options

Total share-based compensation

Tax effect on share-based compensation

Net effect on net income

Effect on earnings per share:

ONTO INNOVATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except per share data)

The 2020 ESPP is intended to qualify under Section 423 of the Internal Revenue Code and is a compensatory plan as defined by FASB ASC Topic 718, “Stock Compensation.” Through the Company’s employee stock purchase plans, employees purchased 83 thousand, 91 thousand and 142 thousand shares during the twelve months ended December 28, 2024, December 30, 2023 and December 31, 2022, respectively.

As of December 28, 2024 and December 30, 2023, there were 0.9 million and 1.0 million, shares available for issuance under the Company’s employee stock purchase plan, respectively.

Share-based compensation was allocated in the Company’s Consolidated Statement of Operations as follows :

(in thousands)

Cost of revenue

Research and development

Sales and marketing

General and administrative

Total share-based compensation expense before income taxes

Income tax benefit

Total share-based compensation expense, net of income taxes

Restricted Stock Units

5 unchanged sentences

The stock price performance or market price performance is measured using the closing price for the 20 -trading days prior to the dates the performance period begins and ends.

ONTO INNOVATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table summarizes the Company’s combined service-based RSUs and market-based PRSUs:

Nonvested at December 26, 2020

(in thousands)

Nonvested at January 1, 2022

1 unchanged sentence

Nonvested at December 30, 2023

Of the 584 shares outstanding at December 30, 2023, 494 are service-based RSUs and 90 are market-based PRSUs.

Nonvested at December 28, 2024

Of the 409 thousand shares outstanding at December 28, 2024, 327 thousand are service-based RSUs and 82 thousand are market-based PRSUs.

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.

The fair value of the Company’s market-based PRSUs granted during fiscal years 2024, 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 $ 251.51 , $ 100.79 , and $ 85.49 , respectively.

As of December 30, 2023, there was $ 26,559 of total unrecognized compensation cost related to RSUs granted under the plans.

As of December 28, 2024, there was $ 29.2 million of total unrecognized compensation cost related to RSUs granted under the plans.

That cost is expected to be recognized over a weighted average period of 1.3 years.

2 unchanged sentences

The plan provides a 50 % match of all employee contributions up to 6 percent of the employee’s salary.

Matching contributions to the plan totaled $ 3,128 , $ 2,965 and $ 2,544 for the years ended December 30, 2023, December 31, 2022 and January 1, 2022, respectively.

Matching contributions to the plan totaled $ 3.2 million, $ 3.1 million and $ 3.0 million for the years ended December 28, 2024, December 30, 2023 and December 31, 2022, respectively.

Other Expense, Net:

Other expense, net is comprised of the following:

(in thousands)

Foreign currency exchange losses, net

2 unchanged sentences

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except per share data)

Income Taxes:

The components of income tax expense are as follows:

(in thousands)

Total income tax expense

The income before tax is comprised of the following:

(in thousands)

Domestic operations

1 unchanged sentence

The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S.

federal income tax rate of 21 % for the years ended December 30, 2023, December 31, 2022 and January 1, 2022, to income before provision for income taxes as follows:

federal income tax rate of 21 % for the years ended December 28, 2024, December 30, 2023 and December 31, 2022, to income before provision for income taxes as follows:

(in thousands, except for percentages)

Federal income tax provision at statutory rate

3 unchanged sentences

US tax on foreign source income

Tax effect of share-based compensation

Non-deductible officer's compensation

Research and development tax credit

Tax impact of audit and statute closures

Change in tax reserves

Change in valuation allowance

Impact of the CARES Act

Withholding taxes

Provision for income taxes

Effective tax rate

Prior year amounts were reclassified to conform to current year classification requirements for comparability purposes.

The total tax provision amounts remained unchanged.

ONTO INNOVATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except per share data)

Deferred tax assets and liabilities are comprised of the following:

(in thousands)

Deferred tax assets:

14 unchanged sentences

Gross deferred tax liabilities

Net deferred tax assets (liabilities)

At December 30, 2023 and December 31, 2022, the Company had recorded valuation allowances of $ 13,960 and $ 11,772 , respectively, on a certain portion of the Company’s deferred tax assets to reflect the deferred tax assets at the net amount that is more likely than not to be realized.

The Company maintains a valuation allowance against its federal foreign tax credit carryforwards of $ 2,317 and state research and development credits of $ 11,644 .

Net deferred tax assets

At December 28, 2024 and December 30, 2023, the Company had recorded valuation allowances of $ 12.2 million and $ 14.0 million, respectively, on a certain portion of the Company’s deferred tax assets to reflect the deferred tax assets at the net amount that is more likely than not to be realized.

The Company maintains a valuation allowance against its federal foreign tax credit carryforwards of $ 0.3 million and state research and development credits of $ 11.9 million.

In assessing the realizability of deferred tax assets, the Company uses a more likely than not standard.

3 unchanged sentences

In making the determination that it is more likely than not that the Company’s deferred tax assets will be realized as of December 28, 2024, the Company relied primarily on the reversal of deferred tax liabilities as well as projected future taxable income.

At December 30, 2023, the Company had tax effected state and foreign net operating loss carryforwards of $ 860 and $ 228 , respectively.

The federal, state and foreign net operating loss carryforwards expire on various dates beginning in 2023 through 2037.

At December 30, 2023, the Company had foreign tax credit carryforwards and state research & development credits of $ 2,317 , and $ 16,213 , respectively.

At December 28, 2024, the Company had tax effected federal, state, and foreign net operating loss carryforwards of $ 0.5 million, $ 0.9 million and $ 0.2 million, respectively.

The federal, state and foreign net operating loss carryforwards expire on various dates begin ning in 2033 through 2049.

At December 28, 2024, the Company had foreign tax credit carryforwards and state research & development credits of $ 0.3 million, and $ 16.8 million, respectively.

The foreign tax credit carryforwards are set to expire at various dates beginning December 31, 2032 .

The state research & development credits have no expiration dates.

The state research & development credit carryforwards are set to expire at various dates beginning December 31, 2028.

As of December 28, 2024, the Company has not provided U.S.

1 unchanged sentence

The Company continues to permanently reinvest the cash held offshore to support its working capital needs.

The Company has accrued $ 0.5 million for additional foreign withholding taxes from an expected liquidating distribution from its Israel entity.

ONTO INNOVATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except per share data)

The total amount of unrecognized tax benefits are as follows:

(in thousands)

Balance, beginning of the period

4 unchanged sentences

Balance, end of the period

The unrecognized tax benefits at December 30, 2023 and December 31, 2022 were $ 13,142 and $ 13,010 , respectively, of which $ 7,231 and $ 7,614 , respectively, would be reflected as an adjustment to income tax expense if recognized.

The year over year increase from 2022 to 2023 is primarily due to additional unrecognized tax benefits related to federal and state tax exposures, offset by expiring tax statutes.

The unrecognized tax benefits at December 28, 2024 and December 30, 2023 were $ 13.0 million and $ 13.1 million, respectively, of which $ 6.7 million and $ 7.2 million, respectively, would be reflected as an adjustment to income tax expense if recognized.

The year over year decrease from 2023 to 2024 is primarily due to expiring tax statutes, offset by additional unrecognized tax benefits related to foreign net operating losses.

It is reasonably possible that certain amounts of unrecognized tax benefits may reverse in the next 12 months;

1 unchanged sentence

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense.

During the years ended December 30, 2023, December 31, 2022 and January 1, 2022, the Company recognized approximately $ 146 , $ 149 and $( 814 ), respectively, in interest and penalties (benefit) expense associated with uncertain tax positions.

As of December 30, 2023 and December 31, 2022, the Company had accrued interest and penalties expense included in the table of unrecognized tax benefits of $ 823 and $ 628 , respectively.

During the years ended December 28, 2024, December 30, 2023 and December 31, 2022, the Company recognized approximately $( 223 ) thousand , $ 146 thousand and $ 149 thousand, respectively, in interest and penalties (benefit) expense associated with uncertain tax positions.

As of December 28, 2024 and December 30, 2023, the Company had accrued interest and penalties expense included in the table of unrecognized tax benefits of $ 564 thousand and $ 823 thousand, respectively.

The Company is subject to U.S.

12 unchanged sentences

See the Consolidated Statements of Comprehensive Income for the effect of the components of comprehensive income on the Company’s net income.

ONTO INNOVATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The components of accumulated other comprehensive income (loss), net of tax, are as follows:

4 unchanged sentences

income (loss)

(in thousands)

Balance at January 1, 2022

3 unchanged sentences

Balance at December 30, 2023

Net current period other comprehensive loss

Balance at December 28, 2024

For the twelve months ended December 28, 2024, December 30, 2023 and December 31, 2022, tax effects on net income of amounts recorded in other comprehensive income (loss) were $( 36.8 ) thousand, $ 0.9 million and $( 0.7 ) million, respectively.

Segment Reporting and Geographic Information:

The Company is organized and operates as one operating and reportable segment;

the design, development, manufacture and support of high-performance control metrology, defect inspection, lithography and data analysis systems used by microelectronics device manufacturers.

This determination is based on the management approach which designates internal information regularly available to the Chief Operating Decision Maker (“CODM”) for making decisions and assessing performance as the source of determination of the Company’s reportable segments.

The Company’s CODM, the Chief Executive Officer, reviews financial information presented on a consolidated basis for the purpose of making operating decisions and assessing financial performance.

The CODM uses net income as the measure of profit or loss to allocate resources and assess performance.

The CODM regularly reviews net income as reported on the Company’s consolidated statements of operations.

Financial forecasts and budget to actual results used by the CODM to assess performance and allocate resources, as well as those used for strategic decisions related to headcount and capital expenditures are also reviewed on a consolidated basis.

The CODM considers the impact of the significant segment expenses in the table below on net income when deciding whether to reinvest profits, propose share repurchase, or pursue strategic mergers and acquisitions.

The measure of segment assets is reported on the balance sheet as total assets.

The CODM does not review segment assets at a level other than that presented in the Company’s consolidated balance sheets.

ONTO INNOVATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except per share data)

Segment Reporting and Geographic Information:

The Company is engaged in the design, development, manufacture and support of high-performance control metrology, defect inspection, lithography and data analysis systems used by microelectronics device manufacturers.

The Company and its subsidiaries currently operate in a single operating segment:

the design, development, manufacture and support of high-performance process control defect inspection and metrology, lithography and process control software systems used by microelectronics device manufacturers.

Therefore, the Company has one reportable segment.

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.

The table below presents the Company’s consolidated operating results including significant segment expenses:

(in thousands)

Restructuring expenses (1)

Merger and acquisitions related expenses (2)

Litigation expenses (3)

Cost of revenue (excluding 1 & 2)

Research and development (excluding 1 & 2)

Sales and marketing (excluding 1 & 2)

General and administrative (excluding 1, 2 & 3)

Operating income

Interest income, net

Other expense, net

Provision for income taxes

The following table lists the different sources of revenue:

(in thousands, except for percentages)

Systems and software

3 unchanged sentences

Revenue by geographic region is as follows:

(in thousands)

Revenue from third parties:

2 unchanged sentences

Total revenue

The following chart identifies our customers that represented 10% or more of total revenue for each of the last three fiscal years:

Samsung Semiconductor

Taiwan Semiconductor Manufacturing Co.

SK Hynix Inc.

The customer accounted for less than 10% of total revenue during the period.

At December 30, 2023 and December 31, 2022, two customers, Taiwan Semiconductor Manufacturing Co.

and Samsung Semiconductor, accounted for more than 10 % of net accounts receivable.

Substantially all of the Company’s long-lived assets are located within the United States of America.

ONTO INNOVATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(In thousands, except per share data)

The following customers represented 10% or more of the Company’s total revenue for the respective years:

Total customer revenue was less than 10% of total revenue.

Two customers’ net accounts receivable balances were individually greater than 10 % of net accounts receivable at December 28, 2024, representing, in the aggregate approximately 47 % of the Company’s total net accounts receivable.

Two customers’ net accounts receivable balances were individually greater than 10 % of net accounts receivable at December 30, 2023 , representing, in the aggregate approximately 29 % of the Company’s total net accounts receivable.

Substantially all of the Company’s long-lived assets are located within the United States of America.

Earnings Per Share:

2 unchanged sentences

The Company’s basic and diluted earnings per share amounts are as follows:

(in thousands, except for per share data)

Basic earnings per share - weighted average shares

5 unchanged sentences

Share Repurchase Authorization:

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.

In February 2024, the Onto Innovation Board of Directors approved a new share repurchase authorization, which allows the Company to repurchase up to $ 200 million 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.

During the twelve months ended December 30, 2023, the Company repurchased and retired 46 shares of its common stock under this repurchase authorization and those shares were subsequently retired.

At December 30, 2023, there was $ 31,577 available for future share repurchases under this share repurchase authorization.

During the twelve months ended December 28, 2024, the Company repurchased and retired 157 thousand shares of its common stock under this repurchase authorization.

At December 28, 2024, there was $ 174.9 million available for future share repurchases under this share repurchase authorization.

ONTO INNOVATION INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table summarizes the Company’s stock repurchases:

(in thousands, except for per share data)

Shares of common stock repurchased

2 unchanged sentences

Restructuring

The Company initiated a restructuring plan to streamline operations and align the Company’s cost structure with its business outlook for 2023.

During the twelve months ended December 30, 2023, restructuring costs of $ 3,571 were recorded in operating expenses for employee severance and $ 7,027 were recorded in cost of goods sold for inventory write-downs primarily related to the exit of older product lines.

All employee severance costs were paid during the twelve-month period.

From time to time, the Company approves restructuring plans, which include workforce reductions, to streamline operations and align the Company’s cost structure with its business outlook.

These restructuring plans may result in charges to cost of goods sold for streamlining of certain manufacturing activities or for inventory write-downs primarily related to the exit of older product lines.

Charges to operating expenses primarily include employee severance costs that are paid during the period incurred, and charges for streamlining of certain operating activities.

Restructuring expenses recorded in the Condensed Consolidated Statements of Operations are as follows:

(in thousands)

Cost of goods sold

Operating expenses

Total restructuring expenses

ONTO INNOVATION INC.

34 unchanged sentences

February 25, 2025

/s/ Stephen S.

February 25, 2025

/s/ Christopher A.

5 unchanged sentences

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.

What changed 10-K

Item 9A. Controls and Procedures