Onto Innovation Inc. announced its second-quarter 2025 financial results, reporting GAAP net income of $33.9 million and diluted EPS of $0.69. Non-GAAP adjusted EPS was $1.25, while revenue for the quarter was $253.6 million, marking a 5% sequential decrease from the first quarter of 2025.
The company's gross profit for the quarter stood at $122.1 million, with a gross margin of 48.2%, representing a 6% sequential decrease primarily attributed to a write-down of excess and obsolete inventory. Operating income was $32.2 million, resulting in a 12.7% operating margin.
For the third quarter of 2025, Onto Innovation projects revenue between $210 million and $225 million, which management expects to be a 'low watermark' for the year. Gross margin is anticipated to be 53% to 55%, including a 1 percentage point impact from tariffs, with diluted EPS projected between $0.75 and $0.95.
Despite the near-term dip, management expressed confidence in a significant rebound in Q4 2025, with revenue expected to return to levels consistent with the first two quarters of 2025. This resurgence is driven by a projected increase of at least 50% quarter-over-quarter in AI logic packaging revenue, and specialty device and advanced packaging revenue approaching peak 2024 levels.
For the full year 2025, advanced nodes revenue is expected to nearly double compared to 2024, and power revenue is projected to exceed its record 2024 levels. The company is also accelerating its 'region-for-region' manufacturing strategy in Asia, with shipments from new facilities expected to begin in Q3 2025, aiming for negligible tariff exposure in 2026. The 'One Big Beautiful Bill Act,' enacted in July 2025, is expected to increase tax expense in Q3 and Q4 2025.
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