Onto Innovation Inc.

Thank you for standing by. 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 Sidney Ho. Please go ahead.

Thank you, Taryn, and good afternoon, everyone. Onto Innovation issued its 2026 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 Placinski, Chief Executive Officer, and Brian Roberts, 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 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. Let me now turn the call over to our CEO, Mike Plosinski. Mike? Thank you, Sidney.

Good afternoon, everyone, and thank you for joining us on our call today. The On2Innovation team is off to an outstanding start to the year as the momentum in our business continues to build in support of strong demand for AI compute. This surge in demand across both front end and advanced packaging resulted in first quarter revenue above our original guidance range and is expected to continue with the heightened outlook for the second quarter revenue, which at the midpoint represents a 20% increase year over year. Momentum should continue into the second half of the year with rising customer expansions enhanced by accelerating new product adoption, and a growing backlog, all indicating more than 15% sequential revenue growth in the second half of the year. In total, we expect revenue growth of more than 30% in 2026. This momentum is driven by the insatiable end market demand for high performance compute and supporting process technologies, including silicon photonics. Customers benefit from our broad and synergistic portfolio of optical process control technologies, which through our software are capable of working together to provide more actionable intelligence to manufacturers. The announcement of our strategic collaboration with the leader in X-ray technology, Ragaku, expands this capability significantly. So while optical metrology is preferred for high volume manufacturing, additional needs are emerging as manufacturers increase the application of exotic materials and 3D structures at transistor and chiplet scale which is where the penetration power and precision of X-ray technology can provide additional information about material composition and underlayer data to potentially improve optical metrology robustness. The key to realizing this benefit is our AI diffract software, where our customers were the first to see the potential benefits of leveraging AI diffract technology to unleash the strength of Regaku's X-ray systems to solve process metrology challenges where other suppliers struggled. Now, with two competitive wins in hand and several other evaluations planned across memory and logic manufacturers, we are confident that the value of this combination to our customers will increase. In addition to revenue from licensing AI-Defract to support Regaku X-ray systems, another revenue stream involves the development of more complex hybrid metrology solutions to provide unique production-capable metrology by combining the strengths of optical and X-ray technologies. The breadth and depth of Regaku's X-ray technology makes them an outstanding partner as they enjoy one of the broadest portfolios of X-ray technology spanning CD, materials analysis, and films. Regaku has over 75-year history in X-ray, with over $600 million in 2025 revenue, of which approximately 40% is related to the semiconductor industry. We're proud to be working together, and our investment of 27% of the business, which provides us a seat on their board of directors, will further strengthen our long-term alignment, provide deeper insight into X-ray technology roadmaps, and position us to jointly advance next-generation hybrid metrology solutions. So, while the Rogaku partnership expands our opportunities for growth tied to future process challenges, today's process challenges are driving increased demand for our solutions in both advanced packaging and advanced nodes. Starting with advanced packaging, we're of course thrilled to have announced our qualification adoption of Dragonfly G5's inspection system at a leading 2.5D logic customer. so closely following our wins in high bandwidth memory for both 2D inspection and 3D metrology. Our team did a phenomenal job to accelerate the delivery of this completely new platform, which delivers improved sensitivity, high throughput, and the flexibility of multiple sensors to provide a compelling and differentiated value proposition to the customer. Shipments to customers are ahead of plan and we are actively engaging with new customers and applications. With a pipeline of over 15 distinct applications across over 10 customers, the outlook for Dragonfly G5 is very promising, providing opportunities for both share gains in current markets and expansion into new markets. Just as 2D features within DAI are shrinking rapidly, so are the 3D interconnects between DAI. Two years ago, the most advanced bumps were approximately 15 to 25 microns high. Today, we're sampling bumps below 6 microns in height. This adoption of smaller, more dense bumps plays to the strength of our 3DI technology and has led to several more OSAC customers and over 10 additional orders in the quarter. Finally, the strong demand for AI and the industry constraints and packaging capacity are causing customers to look at additional processes, such as panel-level packaging, where larger substrates can provide for greater economies of scale as the adoption of heterogeneous packaging drives larger package sizes. We're pleased to learn that JetStep was recently qualified at two packaging suppliers to AI device manufacturers with ramp-up expectations in 2027. Considering all of these growth drivers, we believe our advanced packaging revenue will grow more than 50% in 2026. Turning to our advanced nodes business, it continues to strengthen across both logic and memory. Adoption of our Atlas G6 platform is expanding, following successful competitive head-to-head evaluations at several key accounts for next generation logic nodes, while While in memory, we're seeing solid traction as DRAM customers ramp development of next-generation devices. Additionally, we secured a new application win for TSV metrology using our Atlas system, with initial shipments expected to commence in the second half of the year. With this broad-based strength in logic, DRAM, and early signs of recovery in NAND, we now expect our advanced nodes business to grow approximately 25% in 2026, ahead of the average WFE growth expectations in the low 20s. And with that, let me now turn the call to Brian to review our financial highlights and provide second quarter guidance. Brian?