Onto Innovation Inc. (NYSE:ONTO) Q1 2024 Earnings Conference Call May 9, 2024 4:30 PM ET

Company Participants

Mike Sheaffer - Investor Relations
Michael Plisinski - Chief Executive Officer
Mark Slicer - Chief Financial Officer

Conference Call Participants

Craig Ellis - B. Riley Securities
Brian Chin - Stifel
Charles Shi - Needham
David Duley - Steelhead Securities
Vedvati Shrotre - Evercore
Mark Miller - The Benchmark Company

Operator

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

At this time, I would like to turn the conference over to Mike Sheaffer, Investor Relations. Please go ahead.

Mike Sheaffer

Thank you, Rachel, and good afternoon, everyone. Onto Innovation issued its 2024 first-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 Mark Slicer, Chief Financial Officer.

I would 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 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. 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 our CEO, Mike Plisinski. Mike?

Michael Plisinski

Thanks, Mike. Good afternoon, everyone, and thank you for joining our earnings call this afternoon. Strong and anticipated demand for high bandwidth memory and logic packaging for AI devices resulted in first-quarter revenue at the very high end of our guidance range, 15% over the same period a year ago. Margins came in within guidance, and as Mark will soon outline, we expect to increase gross margin next quarter and improve further in the second half of the year.

Before Mark begins, we'll now review the first quarter highlights, starting with the specialty and advanced packaging customers where we delivered our third consecutive quarterly revenue record, a solid 64% increase over the same period a year ago. In the first quarter, revenue for our Dragonfly systems jumped 30% over the prior quarter, almost exclusively to support packaging capacity growth for AI devices.