Onto Innovation Inc. (NYSE:ONTO) Q3 2022 Earnings Conference Call October 27, 2022 4:30 PM ET

Company Participants

Michael Sheaffer - Senior Director Investor Relations, Corporate Communications & Market Research

Mike Plisinski - Chief Executive Officer

Mark Slicer - Chief Financial Officer

Conference Call Participants

Craig Ellis - B. Riley Securities

Mark Miller - The Benchmark Company

Hans Chung - D.A. Davidson

Trevor Janoski - Needham

Operator

Good day and welcome to the Onto Innovation Third Quarter Earnings Release Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Michael Sheaffer. Please go ahead sir.

Michael Sheaffer

Thank you, Cynthia, and good afternoon, everyone. Onto Innovation issued its 2022 third quarter financial results this afternoon shortly after the market closed. If you haven't received 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 Mark Slicer, Chief Financial Officer.

As always, I'd like to remind you that the statements made by the management on this call will contain forward-looking statements within the meaning of the federal securities laws. Such 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 that may impact Onto Innovation's results, I would encourage you to review our earnings release and our SEC filings. Onto Innovation does not undertake the obligation to update these forward-looking statements in light of new information or future events.

Today's discussion of our financial results will be presented on a non-GAAP financial basis, unless otherwise specified. And as a reminder, a detailed reconciliation between GAAP and non-GAAP results can be found in today's earnings release.

I will now go ahead and turn the call over to Mike Plisinski. Mike?

Mike Plisinski

Thank you, Mike, and good afternoon, everyone and thank you for joining our call today. We'll begin with a brief review of the new US trade restrictions and their impact on Onto Innovation. We'll then cover business and financial highlights from the third quarter and close with our outlook for the fourth quarter and calendar year 2023. So let's begin.

On October 7th, the Commerce Department announced new regulations essentially restricting US semiconductor equipment suppliers from selling to and supporting facilities in China fabricating logic devices below 15-nanometer design rule, DRAM below 19 nanometers, and V-NAND with over 127 layers. Specifically Onto Innovation, packaging and specialty device customers account for over half our year-to-date revenue in China and those customers are not directly affected by these new rules.