Onto Innovation (ONTO) Q1 2026 earnings summary

Executive summary

• Achieved record Q1 2026 revenue of $291.9 million, up 9.5% year-over-year and nearly 10% sequentially, driven by AI compute demand, advanced packaging, and the Semilab USA acquisition.

• Gross margin improved to 55.7% non-GAAP (up 110 bps sequentially), while GAAP gross margin was 50.1% (up from 46.4% sequentially).

• Net income for Q1 2026 was $33.8 million (GAAP), with non-GAAP net income at $70.8 million; diluted EPS was $0.67 (GAAP) and $1.42 (non-GAAP).

• Strategic partnership and 27% investment in Rigaku for $710 million, expected to close in H2 2026, with board representation rights.

• Record backlog, new product momentum, and operational discipline support scalability and margin expansion.

Financial highlights

• Q1 2026 revenue reached $291.9 million, up 9.5% year-over-year and nearly 10% sequentially, exceeding guidance.

• Non-GAAP gross margin was 55.7%; GAAP gross margin was 50.1%.

• Non-GAAP operating margin was 26.7%; GAAP operating margin was 11.5%.

• Non-GAAP EPS was $1.42 (up 13% from Q4 2025); GAAP EPS was $0.67.

• Cash and equivalents totaled $654 million at quarter end.

Outlook and guidance

• Q2 2026 revenue expected at $320–$330 million, up 28% year-over-year at midpoint.

• Q2 non-GAAP gross margin guided to 56–56.5%; non-GAAP operating margin 28–28.6%; non-GAAP EPS about $1.69.

• Q2 GAAP gross margin projected at 56–56.5%; GAAP operating margin at 17.8–18.7%; GAAP EPS at $1.09–$1.18.

• Full-year 2026 revenue projected above $1.3 billion; advanced packaging revenue expected to grow over 50%, advanced nodes about 25%.

• Gross margins expected to improve by at least 50 basis points per quarter in Q3 and Q4, exiting Q4 above 30% operating margin.