What changed in this filing

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Item 1. Financial Statements

2025-08-07 compared with 2025-05-08 · 128 added, 83 removed, 447 unchanged (32% of the section changed)

4 unchanged sentences

Three Months Ended

Six Months Ended

Cost of revenue

3 unchanged sentences

General and administrative

Restructuring and other

Total operating expenses

11 unchanged sentences

Three Months Ended

Six Months Ended

Other comprehensive income (loss), net of tax:

11 unchanged sentences

Marketable securities

Accounts receivable, less allowance of $ 2,090 and $ 2,585

Accounts receivable, less allowance of $ 2,106 at June 28, 2025 and $ 2,585 at December 28, 2024

Inventories, net

25 unchanged sentences

(In thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

21 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents

Net decrease in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

14 unchanged sentences

Currency translation

Unrealized loss on investments

Unrealized gain on investments

Balance at March 29, 2025

Share-based compensation

Issuance of shares through

share-based compensation

Share-based compensation plan

Currency translation

Unrealized loss on investments

Balance at June 28, 2025

Comprehensive

7 unchanged sentences

Balance at March 30, 2024

Share-based compensation

Issuance of shares through

share-based compensation

Share-based compensation plan

Currency translation

Unrealized loss on investments

Balance at June 29, 2024

The accompanying notes are an integral part of these financial statements.

4 unchanged sentences

(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.

Certain reclassifications have been made to prior-period amounts to conform to current-period presentation.

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.

The interim results for the three month period ended March 29, 2025 are not necessarily indicative of results to be expected for the entire year or any future periods.

The interim results for the three and six-month periods ended June 28, 2025 are not necessarily indicative of results to be expected for the entire year or any future periods.

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 28, 2024 (the “2024 Form 10-K”) filed with the Securities and Exchange Commission on February 25, 2025.

2 unchanged sentences

Our fiscal year ending January 3, 2026 (“fiscal year 2025”) is a 53-week fiscal year.

The first quarter of the Company’s fiscal year 2025 ended on March 29, 2025, the second quarter ends on June 28, 2025 and the third quarter ends on September 27, 2025.

The first quarter of the Company’s fiscal year 2025 ended on March 29, 2025, the second quarter ended on June 28, 2025 and the third quarter ends on September 27, 2025.

Our fiscal year ended December 28, 2024 was a 52-week fiscal year.

The first quarter of the fiscal year ended December 28, 2024 ended on March 30, 2024.

The second quarter of the fiscal year ended December 28, 2024 ended on June 29, 2024.

Use of Estimates

8 unchanged sentences

Recent Accounting Pronouncements

There have been no recent accounting pronouncements or changes in accounting pronouncements during the three months ended March 29, 2025, as compared to the recent accounting pronouncements described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2024 , that are of significance, or potential significance, to the Company.

There have been no recent accounting pronouncements or changes in accounting pronouncements during the three and six months ended June 28, 2025 , as compared to the recent accounting pronouncements described in the 2024 Form 10-K, that are of significance, or potential significance, to the Company.

Proposed Acquisition

On June 27, 2025, we entered into a definitive agreement to acquire all the outstanding membership interests of Semilab USA LLC (“Semilab USA”) from Semilab International Zrt.

(“Semilab”), for $ 475.0 million in cash (subject to certain customary purchase price adjustments) and 706,215 shares of the Company’s common stock .

Based on the closing price of Onto Innovation’s common stock on June 27, 2025, the total transaction value is approximately $ 545.0 million.

The transaction is expected to close in the second half of 2025, subject to the satisfaction of customary closing conditions, including U.S.

and Hungarian regulatory approvals.

In the second quarter of fiscal 2025, the Company incurred $ 2.5 million of transaction-related costs recorded within the caption “General and administrative” in the Company’s Condensed Consolidated Statements of Operations.

Fair Value Measurements

10 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.

The following tables provide the assets and liabilities carried at fair value measured on a recurring basis at March 29, 2025 and December 28, 2024:

The following tables provide the assets and liabilities carried at fair value measured on a recurring basis at June 28, 2025 and December 28, 2024:

Fair Value Measurements Using

8 unchanged sentences

Foreign currency forward contracts

Total liabilities

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.

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.

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.

Investment prices are obtained from third-party pricing providers, which model prices utilizing the above observable inputs, for each asset class.

1 unchanged sentence

Non-recurring Fair Value Measurements

During the three months ended March 29, 2025 , the Company invested $ 8.0 million in the equity of a privately-held company.

During the six-month period ended June 28, 2025 , the Company invested $ 8.0 million in the equity of a privately-held company.

There were no such investments at December 28, 2024.

This non-marketable equity investment is recorded at fair value on a non-recurring basis and is classified as a Level 3 asset in “Other assets” on the Condensed Consolidated Balance Sheets.

This non-marketable equity investment is generally accounted for under the measurement alternative, defined as cost, less impairments, adjusted for subsequent observable price changes and is periodically assessed for impairment when events or

circumstances indicate that decline in value may have occurred.

As of March 29, 2025 , there have been no impairments recorded for the non-marketable equity investment.

As of June 28, 2025 , there have been no impairments recorded for the non-marketable equity investment.

Marketable Securities

At March 29, 2025 and December 28, 2024, marketable securities are categorized as follows:

At June 28, 2025 and December 28, 2024, marketable securities are categorized as follows:

Amortized Cost

2 unchanged sentences

(in thousands)

March 29, 2025

June 28, 2025

Government notes and bonds

9 unchanged sentences

Total marketable securities

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, are as follows at March 29, 2025 and December 28, 2024:

March 29, 2025

June 28, 2025

December 28, 2024

8 unchanged sentences

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.

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 (expense) income, net” on the Condensed Consolidated Statements of Operations and were not material during the three months ended March 29, 2025 and March 30, 2024.

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.

The Company has determined that the gross unrealized losses on its marketable securities at March 29, 2025 and December 28, 2024 are temporary in nature.

The Company has determined that the gross unrealized losses on its marketable securities at June 28, 2025 and December 28, 2024 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.

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.

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 29, 2025 and December 28, 2024:

In Unrealized Loss Position For

5 unchanged sentences

(in thousands)

March 29, 2025

June 28, 2025

Government notes and bonds

10 unchanged sentences

The Company, when it considers it to be appropriate, enters into forward contracts to hedge the economic exposures arising from foreign currency denominated transactions.

At March 29, 2025 and December 28, 2024, these contracts were denominated in euro, Chinese renminbi, Japanese yen, Korean won, Singapore dollars, and Taiwanese dollars.

At June 28, 2025 and December 28, 2024, these contracts were denominated in euro, Chinese renminbi, Japanese yen, Korean won, Singapore dollars, and Taiwanese dollars.

Foreign currency forward contracts are not designated as hedges for accounting purposes, and therefore, the change in fair value is recorded in “Other (expense) income, net,” in the Condensed Consolidated Statements of Operations.

1 unchanged sentence

The dollar equivalent of the U.S.

dollar forward contracts and related fair values as of March 29, 2025 and December 28, 2024 were as follows:

March 29, 2025

dollar forward contracts and related fair values as of June 28, 2025 and December 28, 2024 were as follows:

June 28, 2025

December 28, 2024

1 unchanged sentence

Notional amount

Fair value of (asset) liability

Fair value of asset

Goodwill and Purchased Intangible Assets

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

Three Months Ended

Six Months Ended

(in thousands)

3 unchanged sentences

Purchased Intangible Assets

Purchased intangible assets as of March 29, 2025 and December 28, 2024 are as follows:

Purchased intangible assets as of June 28, 2025 and December 28, 2024 are as follows:

Gross Carrying Amount

1 unchanged sentence

(in thousands)

March 29, 2025

June 28, 2025

Finite-lived intangibles:

9 unchanged sentences

Total identifiable intangible assets

During the three and six months ended June 28, 2025, the Company disposed of fully amortized identifiable intangible assets whose gross carrying value totaled $ 117 million.

There were no disposals of identifiable intangible assets during the three and six months ended June 29, 2024.

Assuming no change in the gross carrying value of identifiable intangible assets and estimated lives, future estimated amortization expenses are:

4 unchanged sentences

Inventories, net are comprised of the following:

March 29, 2025

June 28, 2025

December 28, 2024

5 unchanged sentences

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

March 29, 2025

June 28, 2025

December 28, 2024

9 unchanged sentences

Other assets are comprised of the following:

March 29, 2025

June 28, 2025

December 28, 2024

5 unchanged sentences

Accrued liabilities are comprised of the following:

March 29, 2025

June 28, 2025

December 28, 2024

4 unchanged sentences

Other current liabilities are comprised of the following:

March 29, 2025

June 28, 2025

December 28, 2024

8 unchanged sentences

Other non-current liabilities are comprised of the following:

March 29, 2025

June 28, 2025

December 28, 2024

7 unchanged sentences

The Company has entered into agreements with customers that include limited intellectual property indemnification obligations that are customary in the industry.

These guarantees generally require the Company to compensate the other party for certain damages and costs incurred as a result of third-party intellectual property claims arising from these transactions.

These agreements generally require the Company to compensate the other party for certain damages and costs incurred as a result of third-party intellectual property claims.

The nature of the intellectual property indemnification obligations prevents the Company from making a reasonable estimate of the maximum potential amount it could be required to pay to its customers.

Historically, the Company has not made any indemnification payments under such agreements and no amount has been accrued in the accompanying Condensed Consolidated Financial Statements with respect to these indemnification guarantees.

Warranty Reserves

6 unchanged sentences

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

Three Months Ended

Six Months Ended

(in thousands)

8 unchanged sentences

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 $ 100.0 million.

The available line of credit as of March 29, 2025 was $ 100.0 million with an available interest rate of 5.0 %.

The available line of credit as of June 28, 2025 was $ 100.0 million with an available interest rate of 5.0 %.

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

Six Months Ended

(in thousands)

6 unchanged sentences

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

As of March 29, 2025 and December 28, 2024, the Company had contract assets of $ 8.2 million and $ 10.1 million, respectively.

As of June 28, 2025 and December 28, 2024, the Company had contract assets of $ 5.2 million and $ 10.1 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.

1 unchanged sentence

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

As of March 29, 2025 and December 28, 2024, the Company carried a long-term deferred revenue balance of $ 4.4 million and $ 4.0 million, respectively.

As of June 28, 2025 and December 28, 2024, the Company carried a long-term deferred revenue balance of $ 4.5 million and $ 4.0 million, respectively.

Changes in deferred revenue were as follows:

Three Months Ended

Six Months Ended

(in thousands)

5 unchanged sentences

Share-Based Compensation

Restricted Stock Unit Activity

A summary of the Company’s restricted stock unit activity with respect to the nine months ended March 29, 2025 is as follows:

Number of Shares

(in thousands)

Weighted Average

Grant Date Fair Value

Nonvested at December 28, 2024

Nonvested at March 29, 2025

Of the 421 thousand nonvested shares outstanding at March 29, 2025 , 332 thousand are service-based RSUs and 89 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 common stock at the date of grant.

The fair value of the Company’s market-based PRSUs granted during fiscal years 2025 and 2024 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 $ 140.94 and $ 251.51 , respectively.

Share-Based Compensation Expense

The following table presents the detail of share-based compensation expense amounts included in the Company’s Condensed Consolidated Statement of Operations:

Three Months Ended

Six Months Ended

(in thousands)

3 unchanged sentences

General and administrative

Restructuring and other

Total share-based compensation expense

As of March 29, 2025 and December 28, 2024 , there was $ 35.4 million and $ 29.2 million of total unrecognized compensation cost related to restricted stock units granted under the Company’s stock plans, respectively.

That cost is expected to be recognized over a weighted average period of 1.5 and 1.3 years following both March 29, 2025 and December 28, 2024 , respectively.

As of June 28, 2025 , there was $ 48.4 million of total unrecognized compensation cost related to restricted stock units granted under the Company’s stock plans.

That cost is expected to be recognized over a weighted average period of 2.2 years following June 28, 2025.

Equity Awards

The Company granted the following restricted stock units (“RSUs” and each, an “RSU”) and market-based performance restricted stock units (“PSUs” and each, a “PSU”) during the six months ended June 28, 2025:

Awards Granted To:

Type of Award

Number of Shares

(in thousands)

Weighted Average

Grant Date Fair Value

Various executives and employees

Various executives

(1) These awards cliff vest one year from the grant date on May 21, 2026

(2) These awards generally vest ratably over three years, one third per year beginning on the first anniversary of the grant date.

These RSUs will fully vest on various dates between December 2027 and June 2028.

(3) These awards include PSUs with market performance conditions that will be evaluated relative to the performance of certain peers as defined in the award agreement.

The number of units that ultimately vest on March 3, 2027 and March 3, 2028 will be from 0% and 200%, depending on achievement of these performance criteria.

Total grant date value of these PRSUs is approximately $6.9 million and was valued using the Monte Carlo method.

Other (Expense) Income, Net

1 unchanged sentence

Three Months Ended

Six Months Ended

(in thousands)

3 unchanged sentences

Three Months Ended

Six Months Ended

(in thousands)

2 unchanged sentences

Effective tax rate

The income tax provision for the three months ended March 29, 2025 was computed based on the Company’s annual forecast of profit by jurisdiction and forecasted effective tax rate for the year.

The increase in the Company’s income tax provision for the three months ended March 29, 2025 as compared to the three months ended March 30, 2024 was primarily due to an increase in quarterly earnings as well as fewer excess benefits associated with equity compensation.

The income tax provision for the three and six months ended June 28, 2025 was computed based on the Company’s annual forecast of profit by jurisdiction and forecasted effective tax rate for the year.

The increase in the Company’s income tax provision for the three and six months ended June 28, 2025 as compared to the three and six months ended June 29, 2024 was primarily due to fewer excess benefits associated with equity compensation.

The Company’s recorded effective tax rate for the periods presented is less than the U.S.

6 unchanged sentences

The Company continues to monitor available evidence and may reverse some or all of its remaining valuation allowance in future periods, if appropriate.

The Company has a recorded valuation allowance against a certain portion of its deferred tax assets of $ 12.2 million at each of March 29, 2025 and December 28, 2024.

The Company has a recorded valuation allowance against a certain portion of its deferred tax assets of $ 12.2 million at each of June 28, 2025 and December 28, 2024.

The Organization for Economic Co-operation and Development (“OECD”) has been working on a Base Erosion and Profits Shifting (“BEPS”) project that 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.

3 unchanged sentences

As these rules continue to evolve with new legislation and guidance, the Company will 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.

On July 4, 2025, the United States enacted tax reform legislation through the One Big Beautiful Bill Act.

Included in this legislation are provisions that allow for the immediate expensing of domestic United States research and development expenses, immediate expensing of certain capital expenditures, and other changes to the U.S.

taxation of profits derived from foreign

As a result of the enactment of the legislation, the Company expects an increase to tax expense during the third and fourth quarters of 2025, primarily related to changes in the taxation of profits derived from foreign operations, and more specifically, the foreign-derived intangible income deduction.

The Company continues to evaluate the impact the new legislation will have on the Consolidated Financial Statements.

However, as the assessment is ongoing, the Company is not able to quantify the impact on the Consolidated Financial Statements at this time.

Earnings Per Share

3 unchanged sentences

Three Months Ended

Six Months Ended

(in thousands, except for per share data)

15 unchanged sentences

Net current period other comprehensive income

Balance at March 29, 2025

Balance at June 28, 2025

Foreign currency

Net unrealized (losses) gains on

Net unrealized gains (losses) on

available-for-sale marketable

4 unchanged sentences

Net current period other comprehensive (loss) income

Balance at March 30, 2024

For the three months ended March 29, 2025, tax effects on net income of amounts recorded in other comprehensive income was $ 94 thousand.

For the three months ended March 30, 2024, tax effects on net income of amounts recorded in other comprehensive loss was $ 181 thousand .

Balance at June 29, 2024

For the six-month period ended June 28, 2025, tax effects on net income of amounts recorded in other comprehensive income was $ 64 thousand.

For the six-month period ended June 29, 2024, tax effects on net income of amounts recorded in other comprehensive loss was $ 236 thousand .

Segment Reporting and Geographic Information

5 unchanged sentences

The CEO allocates resources and assesses performance of the business and other activities at the reportable segment level.

The measure of segment assets is reported on the Condensed

Consolidated Balance Sheets as “Total assets.” The CEO does not review segment assets at a level other than that presented in the Company’s Condensed Consolidated Balance Sheets.

The measure of segment assets is reported on the Condensed Consolidated Balance Sheets as “Total assets.” The CEO does not review segment assets at a level other than that presented in the Company’s Condensed Consolidated Balance Sheets.

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

Three Months Ended

Six Months Ended

(in thousands)

4 unchanged sentences

Other segment items:

Restructuring expenses (3)

Merger and acquisitions related expenses (3)

Litigation expenses (3)

Restructuring and other (4)

Merger and acquisitions related (4)

Litigation (4)

Operating income

2 unchanged sentences

Provision for income taxes

(1) Excludes restructuring expenses and merger and acquisition related expenses

(2) Excludes restructuring expenses, litigation expenses and merger and acquisition related expenses

(1) Excludes restructuring and other expenses and merger and acquisition related expenses

(2) Excludes merger and acquisition related expenses

(3) Excludes litigation expenses and merger and acquisition related expenses

(4) The Company excludes these expenses in order to provide better comparability between periods as they are not representative of the Company's ongoing operations.

Depreciation expense is a significant expense related to research and development expenses, sales and marketing expenses and general and administrative expenses as shown above.

For the three months ended March 29, 2025 and March 30, 2024, depreciation expense was $ 4.4 million and $ 3.4 million, respectively.

For the six-months ended June 28, 2025 and June 29, 2024, depreciation expense was $ 10.2 million and $ 6.9 million, respectively.

The following table lists the different sources of revenue:

Three Months Ended

Six Months Ended

(in thousands, except for percentages)

5 unchanged sentences

Three Months Ended

Six Months Ended

(in thousands)

4 unchanged sentences

The following customers accounted for 10% or more of total revenue for the indicated periods:

Three Months Ended

Three customers’ net accounts receivable balances were individually greater than 10 % of net accounts receivable at March 29, 2025 , representing, in the aggregate approximately 53 % of the Company’s total net accounts receivable.

Six Months Ended

Two customers’ net accounts receivable balances were individually greater than 10 % of net accounts receivable at June 28, 2025, representing, in the aggregate approximately 37 % 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 28, 2024 , representing, in the aggregate, approximately 47 % of the Company’s total net accounts receivable.

4 unchanged sentences

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.

During the three months ended March 29, 2025 , 492 thousand shares of the Company’s common stock were repurchased under the share repurchase authorization.

At March 29, 2025 , there was $ 99.9 million available for future share repurchases under this share repurchase authorization.

Restructuring

During the three and six months ended June 28, 2025, 0 and 492 thousand shares of the Company’s common stock were repurchased under the share repurchase authorization, respectively.

At June 28, 2025 , there was $ 99.9 million available for future share repurchases under this share repurchase authorization.

Restructuring and Other

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:

These restructuring plans may result in charges to cost of goods sold for streamlining of certain manufacturing activities and other charges, including 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, charges for streamlining of certain operating activities and impairment charges such as plant, property and equipment.

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

Three Months Ended

Six Months Ended

(in thousands)

1 unchanged sentence

Operating expenses

Total restructuring expenses

Total restructuring and other

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-Q

Item 1. Financial Statements