Q2 2025 Onto Innovation Inc Earnings Call

You're holding for the onto Innovation. We are still in many additional participants, in the call should begin shortly. We do. Thank you for your patience and please continue to stand by.

Please stand by.

Good day and welcome to the onto Innovation. Second quarter earnings release conference. Call. Today's conference is being recorded at this time. I'd like to turn the conference over to Sydney. Ho, please. Go ahead.

Thank you, Justin and good afternoon, everyone.

Uh, on to Innovation issued is 2025 second quarter Financial results. This afternoon, after the market closed, our service provider business. Why has technical issues disseminating? The release but you can find it uh, on the on the SEC website at sec.gov or on our company's website, in the investors uh uh investor section.

Joining us on the call today of Michael Pinsky, chief executive officer and Brian Roberts 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, rest and uncertainties that can cause actual results to bury your materially. For more information regarding the risk factors that may impact onto Innovations results. I would encourage you to review our earnings release and our SEC filings

On to Innovation, does not undertake the obligation to update, these forward-looking statements in light of new information or future events.

Today's discussion about 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 vinski. Mike.

Thank you, Sydney. Good afternoon, everyone and thank you for joining us on our call today.

On to innovation delivered a strong second quarter with revenue and operating margin both exceeding the midpoint of our guidance range. More importantly, we made excellent progress in new product adoption and announced the strategic agreement to acquire several synergistic product lines from Semilab. Internationally, we expect the deal to close in the coming months pending standard U.S. and Hungarian regulatory approvals.

This transaction with semilab, expands our portfolio of inspection and Metrology systems by adding electrical surface, Metrology, surface charge, Metrology and materials analysis technology, these additions will allow us to address new challenges. Facing our Advanced nodes and advanced packaging customers as they adopt more exotic materials for use in 3D architectures.

During that period.

The acquired product lines are projected to add over 130 million in annual revenue. The immediately, A Creative to both growth and operating margin and increase. First year, earnings per share by more than 10% with an implied price, to ebita ratio of 10x. It is clear that this transaction will enhance shareholder value.

Now, let's turn to our quarterly highlights and our thoughts about the back half of the year.

As we discussed on our call in May following 10% year-over-year growth for the first half of 2025. We're preparing for a third quarter Revenue to represent a low water mark for the business, however, our discussions with customers continue to support a revenue Rebound in the fourth quarter, consistent with Revenue levels, we reported in the first 2 quarters of the year,

So, let's begin with specialty devices and advanced packaging markets.

AI packaging remains a key driver for us with Innovations and architectures substrates and interconnection strengths, creating new opportunities for dragonfly systems in both 3D and 2D applications

We'll start with the need for high resolution inspection, where our next Generation. Dragonfly platform achieved a significant milestone in the quarter when we successfully validated the platform's op, Optical performance and scan time against our key customers comprehensive, new requirements for 2 and a half.

Logic Packaging.

Our dragonfly platform performed exceptionally. Well, passing all tests and customer pull remains strong. In fact, we are seeing pull from several additional customers. Exploring the need for more advanced inspection while maintaining the flexibility to serve other applications through the other sensors.

As a result, we now expect to ship next-gen, dragonfly systems to several customers in the second half of the year.

The demand is also growing for our subsurface inspection for use in dice, stacking process control, and die, crack inspection, and memory, and logic applications as well as wafer bonding applications for void and delamination detection.

We expect demand to nearly double in the second half over the first half of the year, with most shipments expected in the fourth quarter.

Likewise demand for a 3D. I technology is increasing with tools shipped to more than 10 different customers across an expanding list of applications including memory logic oats and Specialty devices.

The Precision and speed of the 3di is showing advantages not only in traditional applications but also in solving new challenges. For example in 2 and 1/2, D logic packaging, the control of Chip height and flatness is critical to Downstream processes. Our 3di in conjunction with other dragonfly sensors will provide critical data used to

Control this step in Next Generation. AI Packaging, architectures.

Also in the quarter, the performance of 3Di expanded. Our 2D position and co-packaged optics had a win over alternative technologies to measure multiple high parameters critical to the production of these devices.

Though not evident today, the benefits, power savings, and performance—particularly for hyperscalers—are expected to drive a 30% CAGR over the next 5 years.

In summary, we expect a sharp acceleration and AI logic packaging Revenue in the fourth quarter, with Revenue increasing. At least 50% quarter of a quarter. This improved expectation has reduced the anticipated decline in this area by half from what we'd initially projected in May.

together with an expected recovery and power, Revenue specialty device and advanced packaging Revenue in the fourth quarter will likely approach Peak levels seen in 2024

now, turning to the advanced node Market,

Second quarter revenue from memory markets, remains strong led by increased investments in nand while dramm remained near record levels. Gate all-around Revenue, which has grown by more than 50% year-over-year, did flow in the second quarter as expected. However, we're quite pleased to expand our position in this market by recently winning both, Atlas OCD and Iris films orders.

Totaling over 20 million from a new Custer customer moving aggressively to release gate all-around technology.

We expect much of this Revenue in the fourth quarter.

The continued expansion of our common films business is creating a nice backdrop for the adoption of our new Irish G2 platform. Specifically designed to serve the estimated 500 million critical films Market.

Li discussed Advanced node spending is expected to pause in the third quarter. However, customers continue to indicate a meaningful uptick in the fourth quarter, across memory and logic.

For the full year, we expect Advanced nodes Revenue, will nearly double as compared to 2024.

And as we think about fourth quarter Revenue, we're confident that we will see a rebound to levels more consistent with what we have reported in the first and second quarters of this year.

This is based upon constructive discussions with customers meaningful acceleration and AI packaging, spend and an uptick in advanced nodes, from what the expected. And the third quarter.

So before we move into the financials, I want to take a moment to welcome our new CFO Brian Roberts. Brian brings over 2 Decades of experience as a public company CFO with a track record of driving financial performance and creating value for stakeholders, his operational rigor and depth of experience are important assets to the team. As we build a far more resilient and flexible Global operation. While at the same time, strengthening our overall Financial foundation with that, let me turn the call to Brian.

To review our financial highlights and provide third quarter guidance, Brian, thanks Mike. Good afternoon everyone. I'm excited to be here as part of the on 2 Innovation team. And look forward to meeting or renewing acquaintances with many of you over the coming quarters.

As Mike highlighted, we delivered a solid second quarter, with revenue of 253.6 million, or an increase of about 5% year-over-year.

Growth margin for the second quarter was 54.5%.

Excluding approximately 1.1 million of expense incurred in the quarter due to tariffs.

Gross margin would have been approximately 55%.

The operating margin of 25.9% was near the high end of our expected range and was a result of productivity gains in R&D and operations.

Finally earnings per share for the quarter was 1.25 reflecting approximately, a penny of impact due to unfavorable foreign exchange loss and a 2-cent impact caused by an increase in the effective tax rate to 16%.

At a market level. For the second quarter, we recorded Advanced nodes revenue of 89 million or 35% of q2's Revenue.

Specialty devices and advanced packaging, Revenue was 117 million, which represents 46% of Revenue.

And software and services Revenue was 48 million or 19% of Revenue.

Cash from operations was $58 million, representing a cash conversion of 95% of our non-GAAP net income in the quarter.

We ended the quarter with approximately 895 million of cash and Investments representing an increase of 44 million from q1.

Given the pending acquisition of certain certain product lines from semilab. We did not repurchase shares in the second quarter.

Once the acquisition closes, which is expected to happen in the coming months, we will pay Semilab $475 million in cash and issue 706,215 shares of our common stock.

The value of the total transaction based upon 2's closing price as of June 27, 2025, was approximately $545 million.

Now, turning to our outlook for the third quarter.

Revenue for the third quarter is expected to be in the range of 210 to 225 million.

This reflects the anticipated slowdown in advanced nodes spending that has been previously communicated.

As Mike detailed, we are expecting a sharp acceleration in AI packaging. Spend in the fourth quarter, which gives us confidence that Q4 Revenue will return to a level more consistent with what we reported in the first and second quarters of 2025.

Gross margin in the third quarter is expected to be in the range of 53 to 55% which includes an anticipated 1 percentage Point impact due to tariffs.

Excluding tariffs, gross margin for the third quarter is expected to remain flat with Q2 levels.

The tariffs still at the Forefront of today's news, let me take a minute to provide a brief overview of our tariff exposure.

Today we incurred. Tariffs, primarily in 2 buckets.

Inbound tariffs on components we Source into the United States which accounts for about 90% of our cost.

And outbound tariffs primarily on parts sold into other markets within our services business.

We are not currently exposed to tariffs on the sale of our tooling equipment to our customers due to executive orders signed back in April.

We expect incur tariff, expense of approximately 2 to 3 million. In each of the third and fourth quarters primarily due to inbound tariffs.

Mitigate remaining tariff exposure. We are aggressively, installing manufacturing capability, alongside Partners into several Asian markets, to build out our region for region strategy.

The team has done a tremendous job and expects to begin shipments of tools from these new facilities. In the third quarter with roughly half of our product volume shipped internationally by the first half of 20126.

This move will better serve our international customers with a regional base manufacturing approach. Continued sourcing improvements and applying for duty drawback approvals will result in expected 2026 tariff exposure to be negligible.

The 1, cavitt.

We will continue to monitor closely the tariff environment and adjust as necessary.

Turning to operating margins.

Given the lower Revenue expected in the third quarter, we will likely experience a temporary decrease in operating margin to a range of 18 to 21%.

While the team is put short-term controls in, place to reduce discretionary spend in. Q3, we are taking a prudent approach to not significantly impact the operating cost structure, especially in R&D, which could impact our ability to meet customer needs in Q4, and in 2026.

Earnings per share for Q3 is expected in the range of $0.75 to $0.95.

This assumes an estimated tax rate of approximately, 15% and about 49 million shares outstanding.

This guidance does not include any anticipated impacts from the pending semilab acquisition.

And with that, let me turn it back to Mike for some closing thoughts. Before we take your questions.

Thank you, Brian.

In summary, let me leave you with what I believe are the key takeaways from our performance to date. And for what we expect over the remainder of the year

First, we're quite pleased with the progress. We are making across our portfolio, particularly in submicron 2D inspection where we can now meet or exceed, our customers performance requirements.

We're also encouraged by the growing opportunities in 3D, interconnect and gate Metrology as well as in common and critical films.

Second.

We're looking forward to the addition of new Surface, charge mology and materials characterization Technologies to our portfolio, and the potential for new value creation to our customers.

The acquisition is expected to be immediately accretive to both our operate, our margins and DPS. And that's not including synergies that we will discuss after the deal closes.

Third. And as Brian noted, the ramp up of our region for region strategy will allow us to better serve our Global customer base while also improving our operational resilience, mitigate tariff related, exposure and provide meaningful improvements to our financial performance in 2026.

Finally an acceleration and AI packaging, spend will drive fourth quarter Revenue back to a level consistent with the first and second quarter this year.

With the many advancements. We are making to our portfolio organically and through strategic Acquisitions. We believe we are well, positioned to Delight. Our customers and expand our overall share setting the table for a stronger 2026.

And now Justin let's open the call for questions from our covering analysts.

Thank you.

If you would like to signal with questions, please press star 1 on your touchtone telephone. If you're joining us today, use a speaker-phone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, that is star 1. If you would like to signal with questions,

And the first question today comes from Craig Ellis with B. Riley Securities.

Yeah, thanks for taking the question and Ryan, welcome aboard. I look forward to meeting you and interacting Mike. I wanted to start by following up on uh, the encouraging comments. I had about next-gen dragonfly in, um,

In 2 areas 1 you talked about significant Milestones being attained with a key customer. I was hoping for a little bit more color there and just what some of the next steps are with that customer. And then, secondly, you talked about new customer Revenue opportunities with this product later this year was hoping you could elaborate there too.

Sure Craig. So from the, um, you know, we'll start with the first customer. The the Milestone was significant because what we did and we told we, we said, in the last call that we were starting to run samples for customers that proved successful. Now, we ran some very stringent tests, very controlled tests for the customers which demonstrated not only the, the resolution capability or the the optical performance from a detection standpoint but also from a throughput standpoint. And of course, these these requirements weren't just for what's in production today but for what they need, uh, in the years ahead. So passing those Milestones was significant as to next steps, we're still solidifying the system, uh, you know, making sure it performs

As it is now over months of testing reliability, testing etc, etc. Uh, so that we'll be ready to ship a high quality product uh on time for the customer,

and as for the other opportunities, uh, we see

In other markets. And remember, we we mentioned previously that this was designed for front-end applications to go after an open up the front end macro Market but we're also seeing uh,

Other customers and memory Etc. Looking for

potential high resolution inspection to solve, um,

Other yield issues. So the applications vary uh, customer to customer but the performance of the of the dragonfly in the demos have been very very strong and so the the results have been very positive and we are getting increased demand for the tools to be able to ship this year. So we've actually started to bring in inventory and increase our production plans uh to ship. Like I mentioned on the call uh more tools this year than just the the ones planned for the first customer.

Yeah, that's great to hear. Congratulations on the progress from arguments. Secondly uh great to see the business bouncing back in the fourth quarter, the confidence, the company has. What I wanted to do is understand if the business gets back to those first half levels, that implies a range of 250 to 267 million. What would make the difference between coming in closer to the low end versus coming in at the high end in order?

Any any uh particular programs that you're looking at as being critical to uh to achieving that rebound. Thanks. Mike.

Thanks, Craig. I, I think the the range is less driven by the the programs and more by the customer demands. We've seen a lot of movements. So we've seen pull-ins from some, some customers, we've seen some, you know, publicized, you know, publicly announced push outs. Uh, and as I mentioned on the prepared remarks, we've seen, you know, an increase in demand on our AI packaging. So for tools to support a, a packaging. So, you know, as as you know,

This is a tough industry to predict. So I think the Q4 will solidify and the real variables are in the customer demand less. So, uh, our, you know, we're not actually planning on any of our current programs driving, the Q4 Revenue number. So, the new releases in the in the iris films and in the dragonfly, nextg, etc, etc. Those are all baked into the 2026, our view of 2026 and uh, Q4 is really around just the the strong demand we're seeing for the current products. Um,

Yep. And then, nice backlog that we have.

Good luck.

And our next question will come from Matthew Cristo.

With caner.

Hey guys. Um, so I want to hit on this, uh, next-gen Dragonfly as well. Sounds like making great progress there. So, um, just for clarification, do you still expect the evaluation tools to be in customers' hands by your end? And you still think that decision comes, um, in the first half of '26? And then, given the progress you've made, how are you thinking about, um, the potential to regain share there as we move through '26 in this school moves into production? Thanks.

Uh, yeah. We

Definitely.

For that. And as I mentioned, we we're actually increasing the number of tools. We expect to ship this year. Based on based on the strong demand drivers. We see uh,

I mentioned the last call because this customer is well familiar with our tools. The the cut in Period will not be as long as it typically would be for a brand new tool. So the discussions we've had with the customers, there are various areas of performance, they want to verify in production and after that happens they've indicated they would be willing to uh move this into, you know, into volume orders. So I think the guidance we've given has been you know conservative and and and so far.

So pleased at the end of your prepared to Mark, so just looking looking into next year. How are you thinking about onto the growth potential, maybe relative to the market? And and how do you rank order the, the top growth drivers in the next year and maybe some areas that could be expected headwinds. Thank you.

Well for sure we think the the dragonfly the NextGen dragonfly will be a a strong driver. Um you know, there's a lot of applications that it's that that we're finding interest in we mentioned a few uh not just for the high resolution inspection but also for the subsurface inspection 3di.

So there's a lot of applications spending, expanding needs for the Dragonfly that I think is going to drive growth from a percentage perspective.

Because that's much bigger. But from a growth percentage, we're pretty excited about the progress in the film's market as well. So really good progress on the adoption of Iris for common films. Used in both the front end and packaging and we're seeing more Demand on the packaging side. Uh, we also are making progress with the with the introduction of our second generation Iris designed for critical films. And, you know, we expect to be shipping, uh, a tool to a top 3, manufacturer, um, in the next few months for that application.

And our next question will come from Brian Chin with Stifel.

Hi there. Good afternoon and uh thanks for calling us, ask a couple questions and Brian, welcome to the call um maybe to thank you.

Yeah, maybe the the follow-up on some of the prior questions.

it sounds like dragonfly for subsurface defect inspection is is a pretty big factor um in terms of that Q4 rise,

In revenue, is that mainly to 1 customer and is it like a new application on that customer's roadmap? If you could just provide some clarity

No, it's actually not, not 1 customer, it's a several customers. And as we mentioned, we've, we've been expanding the application. So, I I think I talked about, uh,

Dive, Dive, stacking process control. So you can imagine memory is Dice stacking. There are other dice stacking applications, uh, 2 and a half. D logic is also got some alignment challenges with with dye and substrate, and multiple substrates. So, um, you know, we've got

Basically the AI packaging type applications but we also have applications that we're seeing in in the specialty devices particularly in power that is taking advantage of the subsurface defect inspection. And we also mentioned uh early adopters of wafer bonding or or some of the pilot lines focused on wafer bonding applications were also seeing uh demand for the level of sensitivity and throughput. We can offer with our with our subsurface inspection. So it's quite a variety and um you know and that's good. And we continue to find new applications.

Ations.

They're great, um, and then relating to the Next Generation.

Dragonfly. And you know, it's a good announcement that you're shipping to multiple customers or plan to later in the second half.

I'm just curious, Mike, how important do you think this platform is to Defending Your existing positions in hbm inspection?

It's quite important. Uh the the platform is probably the most significant. It's probably the most significant inspection platform we've released and that includes the shift from the

A technology which was the start of the super flies, dragonfly, and Firefly. So, uh, I'd say this is an even more significant transition than that. The capabilities, the optical systems, the illumination, the camera, and the algorithms have changed and improved. This is a really...

A really big step forward as it was designed. I mentioned in, in the call several times. We started this effort several years back, 3 years ago. And, uh, now it's being accelerated and coming to fruition. And we've been, uh, quite happy with the results coming off the way for demos that we've seen

Great. I I speak 1 last Quick 1 and just in terms of the the Q4, you know, Advanced packaging up significantly. Why do you why do you think Advanced nodes? Maybe isn't rebounding as strongly in Q4, would you? If you had to put a finer point on it, do you think it's more dram digestion oriented? Is it time that The Foundry logic? Something else

well, I think it's a couple factors and and

1 of them.

1 of them ties to just our expanded position or wallet share in each of these markets. So as as a customer, let's say ads only 5,000 or 10,000 wafer starts, we might have had a handful of OCD tools, but now we're getting a handful of OCD tools, some films tools and integrate a Metrology.

As well. So our wallet share has been increasing as we demonstrate the value of that Optical Metrology ecosystem.

In addition. So that's 1 Thing, uh, in addition to the, the, the win, at the gate, all around customer which concluded both, uh, the OCD. And the film's Metrology. You know, that's a, that's a significant increase for, for the fourth quarter, mostly in the fourth quarter.

And we'll take a question from Blaine, Curtis with Jeffries.

Hey guys. Uh, thanks for taking my question. Um, actually I wanted to go back to the AI packaging. I, I was wondering if you can give us some color if you look at the overall segment 117 is kind of down 9%. Um, maybe you could just do a little color, rest of between those 2 pieces within that AI packaging and the, uh, specialty, you know how that Trend versus the overall. And then, I really want to know in the acceleration, um, of this, uh, logic packaging. Is it the existing main customer or are you seeing strength from additional osac customers?

Mm, good question. Uh, most of it is the as the existing main customer but we are seeing uh, orders from oats in support of

Essentially, the customers are in support of the...

The 2 and a half. D logic packaging. So it's both. But I would say mostly it's from the existing customer and it's it's a lot of these new applications and also as we mentioned before, the dragonfly does a lot of different uh serves a lot of different application segments within that customer

so, uh,

Yep. Got you and then I'm just curious. You talked about your new dragonfly meeting the specs of the customer. I mean, I guess I was a little bit surprised when your existing tool couldn't meet the specs of colossal. So when you look at the road map, I mean, how much visibility do you have?

For the co-op's roadmap over the next several years beyond the current iteration, that tool will also be able to solve the same amount of steps.

Yeah, it certainly designed for several Generations ahead and the and the customer impact input has been

Uh, confirming that so that we've been working very, very closely, uh, with the customers on the development, on the specifications, on the requirements for this tool. But again, this tool was designed to go after front-end applications so much more advanced than where the, where the packaging area was and still is frankly. So I think we've got plenty of

Runway with the existing technology as we're being released as we're designing and releasing it. But also the road maps extend that even further and there's several aspects to those road maps that as the years go by and we're continuing to innovate and develop that we'll be able to continue to maintain that position.

Thank you.

And moving on to David Dooley, with steelhead securities.

Um, thank you for taking my questions. Um, I was wondering if you might be able to elaborate a little bit more on, um, semilab. And, you know, it was great that you gave us some ideas of what the products and applications might be. But I, I think I seem to remember in the press release that, you know, you were trying to Target the their products at Advanced nodes. So that kind of indicates. I think that they're more trailing Edge. Nodes are specialty nodes. Could you just elaborate on kind of what you think your road map will be as far as targeting um Advanced nodes. And what sort of sales synergies that you might have?

With your own tools.

So,

We gave a little bit of hint in the prepared remarks. We think there's opportunities in the Metrology for more advanced.

Gate structures. So looking at uh the electrical characteristics or residual charges left in the gate and maybe using that combined with our acoustic Metrology to provide some let's say prediction of gait performance before you go to a final test or a probing somewhere in the middle of the the process. So I think that's 1 area on the advanced node side but there's also Advanced packaging applications and I think the materials characterization component is an area that we we will as we run that through our channels to Market. We may find

Find new opportunities, not just in power semi or, or the specialty devices but also, in advanced node applications. I mean the use of exotic materials complex, um, uh, materials and the interaction between layers and and how these materials are stacking up. That's an area of of concern for customers. And if by combining some of their sensor capabilities and our AI diffract modeling technology, we can we can unlock additional capability from the tools. That's a big value to our customers. So, uh, that that's why we said, you know, the synergies will talk about post-closing when we have an opportunity to bring the engineering teams together and and look more at more detail or what what we can actually achieve. But even as it is the as straight as the systems are, they're serving a wide range of markets that we also are serving. Uh so package

Packaging specialty, uh, Power. And um, so their synergies right there,

okay, and then

kind of,

To follow on questions, could you just comment about what you think? The hbm spend will be in the second half of the year and 2026 if possible. And then, um, I have to ask about panel lithography, it's, um, you know, I've noticed, uh, um, someone's got to ask about it. Mike, um, uh, Team Taiwan seems to have actually agreed upon a substrate size. And there just seems like a, you know, a lot more articles about, uh, moving and Adoption of of, you know, rectangular panels. So, I was just curious, if you might be able to comment,

Yeah.

Thanks for asking. Well, actually, uh, planning to ship 2-Step or this quarter. So, uh, it's good. You asked, uh, and hopefully additional, uh, orders for the end of the year. But, um,

So that's on the on, on the lithos side from the the substrate, or the new panel size. Yep. It's clear. The Market's going to the, to the, uh, Square, uh, substrate. Obviously, our stepper was designed for large panels, so 500 by 500, 650 by 650, even larger. And we are getting customer interests and even larger, uh, from a, you know, positioning in the team Taiwan opportunity that's going to be tough for given the cost structure and the performance of the system. So I that's not really the the

Focus of our step or it's a much larger sizes as well. I think what it does though, is demonstrates the importance of moving to square processing especially as the the uh

Uh, chiplet, architectures become more widely adopted. So I think that's positive. And, you know, when we look at the rest of our process control equipment, we are very aggressively uh

Preparing for the.

Process.

Oh, and on HPM, uh, we expect it to be roughly roughly flat to, to the first half.

so, relatively stable,

Do you think it grows next year?

I I would say I would have said yes but I think now with the announcement of 100% tariffs and you know, we there's so much uncertainty and how that really ripples through markets and decisions from customers. I I I think it's a premature to give too much color on on the 2026 right now.

Thank you.

And we'll take a question from Edward Yang with Oppenheimer.

Hi, Mike and uh welcome aboard. Brian, look forward to working with you.

Thank you. My question is also on uh semilab and that looked like a very attractive asset and you picked it up at a at a very reasonable multiple. So just wanted to understand better, you know. Uh, why was it available, uh, you mentioned it growing at a 20% kager is that the expected growth rate you expect for 26, uh, 2026 as well? And was it on tour semilab? That wanted it to be more cash-heavy versus equity in terms of the acquisition.

um, the price paid

so,

Obviously, you know these deals take a long time to come to fruition. So there's a lot of discussions going on and as the stock adjusted obviously onto

View of our stock was.

Was such that we we wanted to shift this to much more cash and um, you know, in the semi lab team agreed and and we we struck the deal, uh, not 100% casually, still wanted to, you know, a portion of the upside that they thought they would capture from the onto onto stock. Uh,

And the other question, just your view, the growth rate for, uh, 2026. I expect that to be aligned with the, the 20% kegger,

We, we expect this to be a. We'll, we'll give more clarity as we move into next year, and we do the closing and and whatnot. But uh, we do expect it to be

Above average growth, let's say that for us.

got it and uh my follow-up question, you know, first of all congrats and

Swinging the momentum on the market share side. It sounds like you're enjoying a lot of positive momentum. Um, just wanted to put the, uh, your comments on 3di Metrology and the right context. So did you displace an incumbent there and are, these 2 are these 10 customers that you gained in 3, uh, using um, using your product in the typical high performance Computing applications that we associate. Um,

In that segment.

So in in most of the applications and we didn't go into a lot of the traditional applications where we mentioned a memory logic and the the oats Etc, that would be all displacing and incumbent. So that would be competitive wins.

In the example of the coop packaged Optics. I I believe it. Yes, it was also a competitive win. So displacing an incumbent and the case of the 2 and 1/2 D logic, that unique application, the customer tried many different ways to solve that,

that, um,

Problem with many different customers and it was a combination of our dragonfly sensors, that ultimately resulted in the right solution with the Precision they required. So that was sort of a new application. Based on the capabilities, we were able to deliver

Got it. Thanks for the time.

My pleasure.

And that does conclude the question answer session. I'll now hand the conference back over to you

Thanks Justin.

We will be participating in a number of invested 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 time. This evening would like to thank you for your continued interest in onto Innovation, Justin, please wrap up the call.

Well, thank you.

And that does conclude today's conference. We do thank you for your participation, have an excellent day.