Onto Innovation Inc.

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

Thank you, Rachel, and good afternoon, everyone. On to 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 Plosinski, Chief Executive Officer, and Mark Slicer, Chief Financial Officer. I'd 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 ON2 Innovation's results, I would encourage you to review our earnings release and our SEC filings. ON2 Innovation does not undertake the obligation to update these forward-looking statements in light of new information of 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'll now go ahead and turn the call over to our CEO, Mike Plosinski. Mike?

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. In addition to volume, we also project demand to increase to address new and emerging critical defects. For example, wafers that are being stacked for high bandwidth memory, or used in 2.5D logic packaging, may be as thin as 50 to 100 microns. These ultra-thin wafers are then prone to the formation of small embedded microcracks, which may propagate through the silicon, making it more susceptible to breakage. Responding to our customers' needs, our Dragonfly platform has been enhanced with a new sensor to detect these subsurface defects at production-capable speeds with orders from several customers and shipments starting in the second quarter. After a record year in 2023, revenue from power device manufacturers declined in the first quarter, but we continue to add new customers and expand our footprint at existing customers. We expect to see growth return in the second quarter and carrying through to the second half of the year. Much of this demand is to improve yield to increase the factory output without increasing the number of wafer starts. Now turning to our advanced nodes business, revenue did incrementally improve as expected but remains at quite low levels. Orders to support advanced logic devices represented the largest growth and was roughly half of the revenue from the advanced nodes customers in the quarter and included both Atlas OCD and Iris planar films. Now I'll turn the call over to Mark to review our financial highlights and the second quarter guidance.