Q2 2026 Onto Innovation Inc Earnings Call Transcript
Key Points
- Record Q2 revenue of $343 million, up 18% sequentially and 35% year-over-year, exceeding guidance.
- Advanced packaging growth outlook raised to ~80% for 2026, driven by strong Dragonfly G5 demand in HBM and 2.5D logic.
- Record backlog surpassing $1.1 billion, with 30-40% covering 2027, indicating strong future visibility.
- Gross margin expanded to 57% in Q2, surpassing initial 2026 expansion target, with further gains expected.
- New growth opportunities in silicon photonics ($50M+ orders) and panel-level packaging, with SAM projected to exceed $500M by 2030.
- Specialty device revenue (power, SDI) declined sequentially in Q2, though expected to rebound in Q3.
- Gross margin headwinds from material input costs, fuel surcharges, and freight expenses persist.
- Dragonfly G5 and Iris G2 contributions to 2026 revenue remain limited, with larger impact deferred to 2027.
- Supply chain constraints remain a concern, requiring increased inventory and active working capital management.
- 2027 growth outlook not yet provided, with uncertainty around market conditions and customer capacity plans.
Good day, and welcome to the Onto Innovation second quarter earnings release. Today's conference is being recorded.
At this time, I would like to turn the conference over to Sidney Ho, Vice President of Investor Relations. Please go ahead.
Thank you, Rachel, and good afternoon, everyone. Onto Innovation issued its 2026 second quarter financial results this afternoon shortly after the market closed. If you did not receive a copy of the release, please refer to the company's website where a copy of the release is posted. Joining us on the call today are Michael Plisinski, Chief Executive Officer; and Brian Roberts, Chief Financial Officer.
I'd like to remind you that the statements made by management on this call will contain forward-looking statements within the meaning of the federal securities laws. Those statements are subject to a range of changes, risks and uncertainties that can cause actual results to vary materially. For more information regarding the risk factors
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