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Date

Thursday, Nov. 6, 2025 at 4:30 p.m. ET

Call participants

  • Chief Executive Officer — Michael Plisinski
  • Chief Financial Officer — Brian K. Roberts
  • Vice President of Investor Relations — Sidney Ho

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Takeaways

  • Revenue -- $218.2 million in revenue for fiscal Q3 2025, slightly ahead of the midpoint of guidance. (Fiscal period ended September 27, 2025.)
  • Gross margin -- 54%, with approximately a one percentage point negative impact from tariffs.
  • Operating margin -- Operating margin was 21.1%, exceeding the top end of guidance due to disciplined cost controls.
  • Adjusted earnings per share -- Adjusted earnings per share were $0.92, near the high end of guidance.
  • Advanced nodes revenue -- $54 million in advanced nodes revenue in the third quarter, representing 25% of total revenue; expected to reach approximately $300 million for the full year compared to $148.5 million in fiscal 2024.
  • Specialty device and advanced packaging revenue -- $113 million, or 52% of revenue; approximately $150 million in specialty device and advanced packaging expected in the fourth quarter.
  • Software and services revenue -- $51 million, comprising approximately 18.5% of non-GAAP net income in the quarter.
  • Fourth quarter revenue guidance -- Projected revenue range of $250 million to $265 million for the fourth quarter, ending January 3, 2026, representing 15%-21% sequential growth, including an additional fourteenth week, primarily from advanced packaging.
  • Fourth quarter operating expenses -- Approximately $77 million in operating expenses for the fourth quarter, with operating margins forecasted between 24% and 26%.
  • Fourth quarter earnings per share guidance -- Earnings per share for the fourth quarter are expected to be between $1.02 and $1.12, based on 49.4 million shares outstanding and a 13%-15% estimated tax rate.
  • Dragonfly system -- First next-generation shipment to a leading AI packaging customer expected in coming weeks, with multiple additional memory customer shipments in December.
  • 3DI technology -- Completed full qualification at two high bandwidth memory customers, now in volume order discussions for next-generation HBM devices.
  • Offshoring and factory expansion -- Over 30% of tool shipments in fiscal Q3 2025 came from extended Asia factories; capability to ship over 60% from international sites is expected by the end of 2026.
  • Pending Semi Lab acquisition -- Transaction amended to exclude a small product line; anticipated to close in the coming weeks at a reduced value of approximately $495 million as of June 27, 2025; expected to be accretive to revenue and earnings in 2026.
  • Customer indications for 2026 -- Packaging customers indicate a potential need for up to 20% more tools to support expansions and new applications in 2026.

Summary

Onto Innovation (ONTO +2.99%) highlighted successful customer qualifications for its 3DI technology and initiated new product shipments, positioning the company for growth in advanced packaging and nodes. Management forecast double-digit sequential revenue growth in the next quarter, driven mainly by 2.5D packaging and Dragonfly system demand, alongside an anticipated full-year doubling of advanced nodes revenue. Strategic expansion of offshore manufacturing is on track to achieve major cost and margin benefits, while the pending Semi Lab acquisition is expected to close imminently and contribute to 2026 profitability. Software and services continue to represent a meaningful portion of the non-GAAP net income mix, and customers have signaled growing demand for new tooling and capacity investments heading into 2026.

  • CEO Plisinski stated, "We expect revenue growth of approximately 18% at the midpoint of our fourth quarter guidance range with advanced packaging as the greatest contributor."
  • Management reported that more than 30% of tool shipments in the third quarter originated from newly ramped Asian factories.
  • Packaging customers are in "preliminary discussions on volume needs for 2026," according to Michael Plisinski, with signals for expanded tool requirements.
  • Gross margin expansion is planned through increased offshoring and tariff mitigation by 2026.
  • CFO Roberts stated, "Operating margins for the fourth quarter are expected to rebound to a range of 24% to 26%," reflecting higher expected revenue and continuous cost discipline.

Industry glossary

  • 3DI: Onto Innovation's three-dimensional inspection technology, enabling process control for densely packed, next-generation semiconductor interconnects, widely used in advanced memory and AI packaging.
  • Dragonfly system: Onto Innovation's advanced 2D wafer inspection platform targeting high-performance AI and memory packaging applications.
  • OSAT: Outsourced Semiconductor Assembly and Test firm, specializing in third-party semiconductor packaging and test services.
  • HBM: High Bandwidth Memory, a type of advanced DRAM architecture used in leading-edge AI and high-performance compute systems.
  • VPA: Vendor-Partner Agreement, a commercial contract outlining recurring or planned supply commitments between Onto Innovation and its largest customers.
  • WFE: Wafer Fab Equipment, referring to semiconductor manufacturing equipment used for wafer processing.

Full Conference Call Transcript

Michael Plisinski: Thank you, Sidney. Good afternoon, everyone, and thank you for joining us on our call today. Underpinning our financial results, which came in ahead of the midpoint of our guidance ranges, the Onto Innovation team made excellent progress with our strategic initiatives, including new product adoption, advancing our offshoring activities. We expect each of these efforts will enhance our leadership position in the exciting advanced packaging and advanced nodes markets and strengthen our outlook for growth in 2026. Market growth in 2026 is likely to include increased investments in advanced packaging to support the strong demand for AI compute.

So we are very pleased to announce that our 3DI technology has successfully completed the full qualification process at not one but two high bandwidth memory customers in the quarter. Our 3DI technology demonstrated superior performance on smaller, denser, 3D interconnects critical for next-generation devices. Following these successful qualifications, we started discussions for volume orders with integrated 3DI and subsurface defect inspection to support next-generation HBM devices. Another win for the 3DI in the quarter was an order from a leading OSAT to support 2.5D applications for AI packaging. To support advanced 2D inspection applications, the launch of our next-generation Dragonfly is progressing well with the first shipment expected in a few weeks, followed by additional systems in December.

After last quarter's optical performance validation by a key customer, we have since completed successful in-house wafer studies for high bandwidth memory and hybrid bonding applications leading to several more evaluation shipments to customers in the first quarter. In fact, the success of these demos has several customers adding the new Dragonfly preliminary discussions on volume needs for 2026. Turning to advanced nodes, we remain on track to deliver a record year in advanced node revenue outside of China. Contributing to this performance is the growing adoption of our Iris films and integrated Metallic metrology platforms both on track to set records for the year.

Looking at the markets broadly, recent headlines continue to reflect strong and sustained demand for AI and high-performance compute. NVIDIA projects that global AI infrastructure investments could reach $3 trillion to $4 trillion by the end of the decade, potentially reshaping the semiconductor supply chain. At the core of this evolution are new memory and logic transistors, and packaging architectures supporting chiplets for logic, 3D stacking for memory, and nascent co-package optics, all designed to increase device performance while lowering power consumption. Onto Innovation continues to play a pivotal role by working closely with our customers across this broad value chain to develop and deliver the process control solutions required to support this AI era.

In the immediate term, we expect revenue growth of approximately 18% at the midpoint of our Q4 guidance range. The greatest contributor to this growth is from 2.5D packaging customers where we expect revenue to nearly double from the third quarter, driven by strong Dragonfly system demand. We expect advanced nodes revenue will also improve with increases in DRAM and logic spending. While discussions for capacity needs in 2026 are in early stages, our packaging customers are indicating the potential need for as much as 20% more tools to support expansions and new applications for our 2D, subsurface, and 3DI inspection technologies.

While quarterly performance may show variation, we expect sequential growth in the first half of next year with more meaningful growth expected in the second half of 2026 driven by increased contributions from new products and potential capacity expansions. Supporting this growth is our aggressive ramp of our extended factories in Asia, and I am pleased to report in the third quarter, we successfully shipped over 30% of third-quarter tools from these factories. Thanks to the incredible efforts of our operations team and supply chain partners, we are now on pace to be capable of shipping over 60% of our production demand from our international locations by the end of 2026.

These efforts will enhance our competitive position, mitigate tariff impacts, provide greater manufacturing flexibility, and allow us to expand gross margins in 2026. Finally, a brief update on our pending acquisition of three complementary product lines from Semi Lab. In October, in response to a second request letter from the Department of Justice, we amended the transaction to exclude a relatively small product line. We currently expect that the transaction will close in the coming weeks and be accretive to both revenue and earnings in 2026. And with that, let me turn the call to Brian to review our financial highlights and provide further fourth-quarter guidance. Brian?

Brian K. Roberts: Thanks, Mike. Good afternoon, everyone. Third-quarter performance met or exceeded expectations across key financial metrics as we work to improve our forecasting processes and implement more disciplined spending controls. Revenue for the quarter was slightly ahead of the midpoint of our previous guidance range, at $218.2 million. Gross margin for Q3 2025 was 54%, and includes approximately a one percentage point impact related to tariffs. Operating margins of 21.1% exceeded the top end of our guidance range as we maintained our focus on variable cost control in the quarter. Finally, adjusted earnings per share for the quarter were towards the high end of our guidance range at $0.92.

At a market level for 2025, advanced nodes generated revenue of $54 million or 25% of revenue, as DRAM and NAND revenue decreased as expected sequentially from the second quarter. For the full year 2025, advanced nodes revenue is expected to double to approximately $300 million as compared to $148.5 million in full year 2024. Specialty device and advanced packaging revenue was $113 million or approximately 52% of revenue. The strong rebound to approximately $150 million in specialty device and advanced packaging expected in Q4 revenue for this market should finish slightly higher than $500 million for the full year. Software and services revenue of $51 million comprises approximately 18.5% of our non-GAAP net income in the quarter.

Given the pending acquisition of Semi Lab, we did not repurchase shares in the third quarter. Once the acquisition closes, which is expected in the coming weeks, we will pay Semi Lab $432.3 million in cash and issue 641,771 shares of our common stock. As of June 27, 2025, the value of the total transaction based upon Onto's closing price is approximately $495 million, a decrease of about $50 million from the original terms of the deal. Now turning to our outlook for the fourth quarter. Revenue is expected in the range of $250 million to $265 million representing 15% to 21% sequential growth.

As Mike noted, the majority of the Q4 increase is expected to be driven by strength in Advanced Packaging with more modest improvement in advanced nodes, specifically sequential gross margin improvement in Q4. Operating margins for the fourth quarter are expected to rebound to a range of 24% to 26% on operating expenses of approximately $77 million. The fourth quarter, which will officially end on January 3, 2026, includes an additional fourteenth week given the company's historical fiscal closing structure. The impact of this in the fourth quarter represents approximately 120 basis points of operating margin. Starting with 2026, Onto Innovation will switch to a quarterly calendar schedule of March 31, June 30, September 30, and December 31.

Earnings per share for the quarter are expected to be in the range of $1.02 to $1.12 per share assuming an estimated tax rate of approximately 13% to 15%, and about 49.4 million shares outstanding. As a reminder, we are not including the pending Semi Lab transaction in our current Q4 guidance. And with that, let me turn it back to Mike for some closing thoughts before we take your questions. Mike?

Michael Plisinski: Thank you, Brian. In summary, we've made great progress on key initiatives that will position us for growth in the coming year. On the product front, we plan to ship our next-generation Dragonfly system in the coming weeks to a leading AI packaging customer, with several additional systems slated for memory customers in December. Our 3DI technology has now been validated by two leading suppliers of high bandwidth memory, and adoption is expanding across a broader customer base. From a broader market perspective, the long-term outlook for AI in advanced node investments continues to build, driven by aggressive infrastructure expansion plans globally over the next several years.

With our differentiated product portfolio and technology leadership in advanced nodes, advanced packaging, and specialty devices, Onto Innovation continues to be well-positioned to serve our customers and capitalize on these secular trends. Let's open the call for questions from our covering analysts. We expect to see organic growth in 2026 with momentum building toward the second half of next year. And now, Rachel.

Operator: Thank you. If you are dialed in via the phone and would like to ask a question, please press 1. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Please limit yourself to one question and one follow-up in order to give everyone an opportunity. Please rejoin the queue with additional questions. Again, please press 1 to ask a question. And we will take our first question from Craig Ellis with B. Riley Securities.

Craig Ellis: Yes. Thanks for taking the question. And congratulations on the good execution, guys. I wanted to start, Mike, just by following up on your most recent comments. Regarding organic growth through the year. Can you comment on what you'd expect for your two big segments and any color on the linearity with those businesses? Advanced packaging and advanced nodes and you mean for 2026?

Michael Plisinski: Yep.

Craig Ellis: For 2026. Yes.

Michael Plisinski: So I think it's a little early to provide especially linearity in quarter-to-quarter kind of view. If we look at first half, second half, we think the first half is going to be sequentially better than 2025. So we do expect growth in the first half, with more significant growth in the second half driven by several different expansions that our customers are talking to us about as well as the impact from the new products coming online being more widely adopted, volume production. So that would be the 3DI, and it would include the Dragonfly the new Dragonfly system.

Craig Ellis: Yeah. Nice to see on the new products. And then the second question is for Brian. Brian, as we look at gross margins next year, can you just help us with some of the gives and takes? Tariffs have been in gross margin, but when can that come out? And how should we look at some of the other gives and takes with that line item?

Brian K. Roberts: Sure. On the gross margin front, I mean, I think we'll start to see the tariff impact start to mitigate next quarter. Keep in mind, our tariffs are on inbound, and so they sit in inventory for a quarter, and then they start to come out. So as we continue to ramp up expansion of the offshore extended factories, and more tools are going from there, we'll start to mitigate the tariff risk. I think as we go through the transition to extended factories, we'll see a little bit more gross margin expansion as we get towards 2026. But we're certainly poised to have a good solid year of gross margin expansion.

Craig Ellis: Got it. And then lastly and somewhat clerically, once Semi Lab closes, do you plan to host another conference call or how will you update us once that's done?

Michael Plisinski: My expectation is we'll just update you as part of the next earnings call. I don't think we'll provide an update right after close. We're gonna take a little bit of time meeting with the team, having some more detailed discussions. And then, you know, provide a more informed view of the business probably in the next earnings call.

Craig Ellis: Makes sense, Mike. Thank you.

Brian K. Roberts: Thank you.

Operator: And we will take our next question from Ezra Weiner with Jefferies.

Ezra Weiner: Thanks for taking my questions. First one would be about your commentary on 2.5D packaging. You talked about sequential growth into March. I just want to make sure I heard that correctly and you weren't talking about the entire business. And then the other sequential question would be when you talk about sequential growth in the first half, is that half over half? Or quarterly sequential growth?

Michael Plisinski: So when I mentioned sequential growth, it was half over half. So 2026 would be sequentially stronger than 2025. And I'm not sure the 2.5D question on what was your question there?

Ezra Weiner: You had talked about sequential growth immediately after 2.5D packaging. I was wondering if that kind of had to do specifically with 2.5D packaging.

Michael Plisinski: It was yeah. Mainly just, I think AI packaging is primarily driven by our driving growth, and it's primarily due to the AI packaging. I think that was about Q3 to Q4.

Ezra Weiner: The second question would be, with the understanding that you might not see revenue until the second half from the new Dragonfly, can you talk about the ecosystem between now and then and the timing of when you would see revenue from that?

Michael Plisinski: It's very possible we'll see revenue in the first half. It's just going to be onesie twosies until it starts shipping in larger volumes. So second half will be more meaningful. But I would expect to convert some of these early shipments in as soon as possible.

Ezra Weiner: You're welcome.

Operator: Thank you. And we will take our next question from David Dooley with Steelhead Securities.

David Dooley: Yes. Thanks for taking my question. Regarding the qualification of the 3DI tool at two HBM customers, is that tied to the ramp of HBM4? And are you gonna be the first source or the second source there?

Michael Plisinski: Well, we're not aware of anyone else being qualified through these stringent tests yet. That's something that only our tools can do but it's a very new applying the 3DI technology that we supply in different process steps. Do they want to make the change now in existing processes or only in the forward-looking?

David Dooley: Okay. My second question is more about the Dragonfly. Could you maybe just rerun everything you said about the Dragonfly so I get it?

Michael Plisinski: A Dragonfly to a 2.5D logic packaging customer in on the successful demos we've done in the third quarter, we are shipping several more Dragonfly ships.

David Dooley: Okay. And it's not just to one customer. It's to multiple customers.

Michael Plisinski: Correct. Yep. It's the multiple customers.

David Dooley: Yep. And then final question from me is far as you know, your core inspection business with HBM. Do you think that's gonna be a growth factor in 2026 or in you know, has it started to turn on with the ramp of HBM4? Or how should we think about that?

Michael Plisinski: I think the customers are also still trying to figure that one out. So from their perspective, there's going to be some growth for sure. What it means for the process control is not completely clear yet. The customers are working on their allocations, what they spent on process control in the prior year, how much can be reused, do they adjust sampling plans, etcetera. The normal things they always do. So that's the discussions we're having now with customers. I would say the real good strong takeaway, though, is the positions of our tools are demonstrating unique capabilities for the next generation devices.

So as customers start to bring those next-generation devices into more higher volume, primarily in the second half of next year, we should see an outsized positive impact from that.

David Dooley: Alrighty. Thank you.

Michael Plisinski: Thank you.

Operator: We will take our next question from Matthew Prisco with Cantor.

Matthew Prisco: Hey, guys. Thanks for taking the question. So I guess first one will stick on Dragonfly. It seems like making good progress in the quarter. So kinda after you shipped these initial evaluation tools, what milestone should we look to from here? And how should we think about the timing of customer adoption decisions, both at CSM and all these ancillary opportunities?

Michael Plisinski: I think it would be reasonable to assume second half. In fact, we said that. The second half, we would expect to see incremental rev to the volume adoption, the cut into production.

Matthew Prisco: Maybe going to that 3DI, those new qualifications, can you kinda give some more color on what drove the wins there? How you're seeing your competitive positioning in that technology today? And then how do we think about the translation of those wins to the P&L and potential magnitude of impact there? Thank you.

Michael Plisinski: So the 2026 for the 3DI. There'll be an incremental improvement, and then we'll see a bigger impact even in 2027. By incremental, I mean, tens of millions of dollars will be driven by 3DI. So now why are we winning? Why is the 3DI so important? There's a couple things going on. One, in the last call we talked about several well, let me start with the technology. The technology is differentiated in that it uses the laser-based coherent light.

Coherent light allows us to focus it in between the dense smaller bumps, and we can do that at a throughput and with the precision that the customers require, which is extremely stringent as they're moving from HBM3E, 4, 4E, and beyond. That's one thing. So that's one of the reasons we've won. Those two qualifications, and it was obviously a very stringent evaluation period. The second is because of this capability, where the technology and what it's providing, opening up several new applications. So actually, at least three new applications.

One is the one I described earlier where we can potentially apply 3D bump metrology at a different step in the process, which will allow customers to do some rework and provide a better yield improvement. That's one. Two is there's two other new applications where the technology has the speed and the precision to provide other types of metrology across surfaces, so across die, die warpage metrology, as well as some specialized metrology for 2.5D packaging. Those are the three.

Operator: Thank you. And we will take our next question from Brian Chin with Stifel.

Brian Chin: Hi there. Good evening. Maybe first, just to follow-up on the 3D discussion. From the sounds of it, this sounds like it's the free reflow bump metrology step. Mike. Is that correct? And is this an additional or new metrology step for many of these adopters?

Michael Plisinski: Correct. And it is a new metrology step because previous technologies couldn't reliably measure at that pre-reflow step. The light would scatter too much, is what we're told.

Brian Chin: Okay. And would you expect in terms of the amount, or the metrology time required kind of post-reflow, would that kind of potentially decrease that?

Michael Plisinski: I think you would eliminate. So the customers and their intention, our discussions are around shifting the metrology to pre-reflow so you don't need to do a post-reflow. There's a strong correlation there, but you have the ability to rework.

Brian Chin: Got it. Thanks. And then kind of for the follow-up question, you know, advanced those WFE markets as well as advanced packaging. You know, Q3 this year, kind of low quarter. You're up in Q4. And so sequential first half versus second half, you know, it's helped by that kinda low March. But when you kinda think about whether you know, the quarters without giving a specific guide quarters one Q2 q, whether they'd be kinda linearly up or there could be sort of, you know, up or down. What are the kind of the key swing variables you're looking at around either advanced packaging, co-ops investments, maybe also kind of, you know, changes in sampling plans for use, etcetera.

And also advanced nodes where there does seem to be some pickup down the DRAM side of that spending. Maybe you can weave in kind of, like, even advanced foundry front-end spending. So kind of the all the kind of variables that you think about in terms of how the revenue could trend in the first half next year.

Michael Plisinski: So I think it really depends on the Right? So and that's always the case. That's why I'm struggling how to answer it. A lot of customers are opening and have spoken about factory expansions, but most of them are going in for second half. We, of course, get process control systems in early. So we get in before that larger WFE starts to rise and pick up from that. So and that's normal process control spending patterns. That's one. On the AI packaging front, there is some level of capacity process optimization, that's both positive and negative. So some of it is, hey, because of the challenges with the new technologies, some of it is tied to, hey.

We overbought in one area. We need to optimize some processes there. But holy mackerel, we have struggles in another area and we need the new technologies. So some of these technologies where we're seeing a lot of demand. Some of the subsurface applications are new 3DI applications I mentioned are new. Are for new applications. So it's very hard for us to quantify that and that's why we said there could still be so to answer your question in one way, we don't expect linear. We do expect some variability quarter to quarter. It's kinda natural. But, the secular trend, we think, is positive. And we also think we're well-positioned.

Brian Chin: Okay. That's helpful, Mike. Thanks.

Operator: Thank you. And we will take our next question from Edward Yang with Oppenheimer.

Edward Yang: Hi, Mike. Just to clarify on a couple of numbers, the tens of millions of 3DI you're talking about, that's for 2026. Correct? And I also heard you say something about shipping 20% more tools. Was that related to AI packaging?

Michael Plisinski: Correct. Yep. And it's based on initial discussion. So the early indications, of going back to Brian Chin's question, we're getting early indications of a certain level of demand, but that can change. And we're still in the early stages of discussion. So it's really hard for us to provide any kind of real guidance on that. But the 3DI correct. That was for 2026.

Edward Yang: And the 20% more tools?

Michael Plisinski: It's for primarily AI packaging. Correct.

Edward Yang: Okay. And, that would account for be shipping, or recognizing much revenue the fact that you from your new high res Dragonfly G5 tool until the second half of 2026. Right?

Michael Plisinski: Correct. Yep.

Edward Yang: Okay. Wonderful. And, could you just comment, provide your thoughts on the tightness and the strong pricing your customers are enjoying in memory markets and how that might pertain to 2026. You had a $169 million DRAM VPA starting this year. Does that cover this current market strength that you're seeing in those memory markets? Or do you expect more orders, you know, coming down the pipe?

Michael Plisinski: I believe the existing VPAs covered this year, and I believe we've worked through those. I don't think there's any ex we've had actually a pretty strong year in advanced nodes. So I believe most of that is already covered. And the discussions we have now are all new VPAs for, you know, next year and slightly beyond.

Edward Yang: Okay. And my follow-up would just be on Semi Lab again. On the amended terms, were you surprised that regulators had wanted some scrutiny around that? And could you just provide your updated confidence and approval you know, with the changes that you made and, the timing on that?

Michael Plisinski: Well, since it's not closed and not wanting to ruffle any feathers, from potential regulators, I will say, yes, we were surprised but, you know, we worked cooperatively with Semi Lab team with, with everybody to find a very reasonable solution.

Edward Yang: Okay. Perfect. Thank you, Mike.

Operator: And we will take our next question from Vedvati Shrotre with Evercore ISI.

Vedvati Shrotre: Hi, guys. Thanks for taking my question. The first one I wanted to understand was the first half 26 sequential increase that you talked about like, where do you have the most confidence advanced node versus packaging, like, is one doing better than the other? If you could give any directional sense.

Michael Plisinski: I think I actually don't have the numbers in front of me, but my impression is that it's probably advanced nodes and specialty devices continuing to show some strength. Advanced nodes also okay. But advanced nodes, you know, many of those factors are second half. So I think that'll be much stronger in the second half.

Vedvati Shrotre: So sorry. Advanced nodes will be more stronger in the second half. Is that?

Brian K. Roberts: Yeah. I think advance so, basically, the advanced packaging segment, advanced packaging specialty device, you know, probably coming out and then advanced nodes in the second half. But again, as Mike has kind of pointed out, a lot of those discussions are still early days as we work through you know, exact timing of pay of spend with customers and all of those pieces.

Vedvati Shrotre: Yeah. Understand. Okay. And then, you know, like, I think last quarter or the whole of this year, you sort of had that view that, you know, one of the HBM suppliers isn't qualified, and that's kind of know, limiting the visibility you have on HBM progression. Like, how has that conversation changed, you know, last quarter versus this quarter? Has the visibility gotten much better now that the demand dynamics have changed so significantly? For the memory suppliers.

Michael Plisinski: Well, I won't. The visibility is improving for in with regards to our discussions with the suppliers, but you know, the who's been qualified and who's what the allocations are, I'm not so sure. That visibility has gotten much better.

Vedvati Shrotre: Okay. And then the third thing I kinda wanted to understand was if I sort of take the larger gaps, like, you know, the lamp, not necessarily your competitor but a lot of them are already seeing, like, strong quarter on quarter growth on HBM and DRAM. Like, fourth quarter versus third quarter. Are you seeing any of that?

Michael Plisinski: You mean in the fourth quarter?

Vedvati Shrotre: Yes.

Michael Plisinski: In the fourth quarter? Yes. We mentioned that we are seeing strength in the memory. Yeah. DRAM, then some logic. Obviously, NAND is still very weak.

Vedvati Shrotre: And HBM is muted. Is that kind of fair?

Michael Plisinski: Well, then HBM goes to packaging. Side. And packaging, I think we've just we mentioned that it's an extremely strong side. I think we said growth from the AI packaging know, almost 50%.

Vedvati Shrotre: Right. So the packaging growth, my in the most of it was driven by, essentially, your OSAT plus kind of the foundry logic piece growing. Does that have HBM elements in there as well?

Michael Plisinski: For sure, HBM is part of our Q4 forecast. Is driving most of the growth. I mean, I didn't break it all down into that. But it's for sure AI packaging, and that includes HBM.

Vedvati Shrotre: Sounds good. Thank you.

Michael Plisinski: Thank you.

Operator: Once again, if you would like to ask a question, please press 1. And at this time, we have no further questions. I would now like to turn the call back to Sidney Ho for closing remarks.

Sidney Ho: Thanks, Rachel. We will be participating in a number of investor conferences throughout the quarter. We look forward to seeing many of you there. A replay of the call today will be available on our website at approximately 7:30 Eastern this evening. We'd like to thank you for your continued interest in Onto Innovation. Rachel, please conclude the call.

Operator: This does conclude today's call. Thank you for your participation. You may now disconnect.