Onto Innovation Posts $410 Million Q3 Revenue, Up Nearly 90% Year Over Year

Onto Innovation pulled in $410 million of third-quarter revenue, up 19% sequentially and nearly 90% from a year earlier, and lifted its fourth-quarter guidance to $430–$450 million. The semiconductor inspection and metrology equipment maker now expects sequential revenue growth through at least the first half of 2027, with a backlog that gives it order visibility into 2028.

"Chip demand remains strong, visibility has never been better, and our product portfolio across the value chain has never been stronger," CEO Michael Plisinski said on the earnings call. He added that Onto hasn't seen customers slow their orders despite broader questions around data center spending.

Backlog grew another 20% to more than $1.3 billion as of the call, Plisinski said — enough demand on the books to see the company into 2027 and, in some cases, 2028 and beyond. In plain terms: the order book is doing the forecasting.

Where did margins and EPS land?

Every headline metric beat the high end of guidance: revenue, operating margin, and earnings per share.

• EPS: $2.44, up 26% from Q2
• Gross margin: 57.6%, up 60 basis points (one basis point = 0.01 percentage point) sequentially
• Operating margin: 32.6%, up from 30% in Q2

Management noted the discussion was on a non-GAAP basis (a measure excluding one-off items) unless stated otherwise.

For Q4, Onto guides to gross margin slightly above 58%, an operating margin of 34% at the revenue midpoint, and EPS of $2.69. That assumes a roughly 16% non-GAAP tax rate and about 50 million shares outstanding. At the midpoint, CFO Brian Roberts said, full-year revenue reaches $1.485 billion — growth of more than 45%.

Margins didn't just meet the bar; they cleared it on every line.

Why is advanced packaging the engine?

Advanced packaging and specialty device products grew 35% sequentially and made up a little over half of Q3 revenue, Roberts said. Onto expects advanced packaging revenue to rise more than 80% in 2026, split fairly evenly between 2.5D logic packaging and high-bandwidth memory, or HBM (the stacked memory used alongside AI processors).

Product-level momentum is stacking up fast:

• Dragonfly G5 inspection platform: more than 10 customers since launching earlier this year; 2027 purchase orders already equal twice the platform's expected 2026 revenue
• Requests for new Dragonfly applications doubled during Q3
• 3Di interconnect metrology revenue through Q3 has already more than doubled its full-year 2025 level, and Plisinski expects Q4 alone to exceed the first three quarters of 2026 combined
• Panel revenue, referring to JetStep lithography tools, should double in 2026, with backlog supporting more than 40% growth in 2027

How solid are advanced nodes and the 2027 path?

Advanced-node revenue came in at roughly $135 million, split about 60% memory and 40% logic, with software and services contributing the remaining $60 million, Roberts said. Onto expects advanced-node revenue to grow more than 35% in 2026 and at a faster rate in 2027, driven by adoption of the Atlas G6 metrology platform and more measurements taken directly inside chip structures.

Plisinski flagged the greatest confidence in logic and DRAM demand, with NAND adding growth too. Roberts acknowledged some anticipated Q4 deceleration in advanced-node revenue. Plisinski expects advanced packaging revenue to grow more than 35% in 2027, with fuller detail toward year-end.

On margins, Roberts said an average improvement of roughly 50 basis points per quarter is a reasonable framework for 2027, pending formal planning. Higher supply-chain costs, including memory, are a headwind, but Plisinski said Onto is making design changes to cut usage where it can.

What about the Rigaku stake and cash?

Onto ended September with approximately $1.25 billion in cash and short-term investments. It generated about $80 million in quarterly free cash flow and paid $720 million in August for a 27% stake in Rigaku, booking an unrealized loss of roughly $40 million. Roberts said the company will mark the holding to market each quarter in GAAP results while excluding unrealized gains or losses and their tax effects from non-GAAP figures.

Onto Innovation, formed in 2019 through the merger of Nanometrics and Rudolph Technologies, builds process-control, inspection, metrology, lithography and software tools for chipmakers and advanced packaging producers.

A $410 million quarter, a $1.3 billion backlog and guidance stretching to 2027 — Onto's growth story currently writes itself in numbers.