ONTO 10-K & 10-Q changes, risk factors and insider trading

We arerecently implementingimplemented a new enterprise resource planning system. Our failure to implementeffectively it successfully, on timeoperate and onmaintain budgetthe new system could have a material adverse effect on us.

We are subject to various environmental laws and regulations that could impose substantial costs upon us, and failure to comply with such laws and regulations may harmimpact our business, operating results and financial condition.

We may choose to acquire or invest in new and complementary businesses, products or technologies instead of developing them ourselves, and we may be unable to complete these acquisitions or may not be able to successfully integrate an acquired business in a cost-effective and non-disruptive manner.

We need to continually evaluate our global supply chainschain and assess opportunities to reduce costs. We must also enhance quality, speed and flexibility to meet changing demand for our products and product mix and uncertain market conditions. Our success also depends in part on refining our cost structure and supply chains so that we have flexibility and can maintain and improve profitability. DeteriorationRecent changes in the tariff environment such as discussed herein under the heading “Tariffs, export regulations, and other market barriers have impacted and may continue to impactcause fluctuation in our abilitycosts. to compete for the business of domestic customers in China and other jurisdictions, which has adversely affected and may continue to adversely affect our, business, financial condition and results of operations,” political instability or changes in suppliers may cause our costs to increase and, ifIf we are not ableunable to successfully negotiate price reductions with our suppliers, adjust our operations to reduce tariff exposure, and/or offset the increased costs by charging higher sales prices, our margins will decline, resulting in an adverse impact to our business and results of operations. Political instability and/or changes in suppliers may also cause a decline in our margins. To improve margins on our products, we would needcosts to negotiate price reductions with our vendors. But we cannot be certain that we will be able to do so in a timely manner, or at all. Failure to achieve the desired level of cost reductions could adversely affect our financial results.increase. Despite our efforts to control costs and increase efficiency in our facilities, changes in demand could still cause us to realize lower operating margins and profitability.

Further, our gross margins and financial performance may be adversely affected by increases in our operating costs, such as material, labor, supplier costs, logistics and energy costs, all of which have been and may continue to be subject to inflationary pressures. Operating costs have increased and may continue to increase further as a result of higher tariffs, supply chain disruptions in connection with the sourcing of components, materials, equipment, engineering support, and services, labor shortages, high inflation rates, and cost increases attributable to the effects of geopolitical events, such as the Russia-Ukraine conflict. In addition, we source components for certain of our tools from a supplier in Israel. If the conflict in Israel and Gaza and the surrounding area escalates, it could disrupt our supply chain, resulting in a material adverse impact on our business.events.

Our efforts to mitigate any cost increases, including any cost increases resulting from existing or future tariffs, labor impacts and supply chain delaysdelays, disruptions and shortages may not be successful, and we cannot predict the duration of these current trends or other future increases in operating costs. We may not be able to pass cost increases through to our customers fully (or at all), and if supply chain delaysdelays, disruptions and shortages delay delivery of our products, our customers may seek to purchase from our competitors. Any such occurrence may have a material adverse impact on our gross margins and business, financial position, results of operations and cash flows.

We produce the majority of our systems in our manufacturing facilities in the following locations: Wilmington, Massachusetts; Milpitas, California; Tucson, Arizona; and Bloomington, Minnesota. We also use contract manufacturers in China,Japan, JapanTaiwan, Vietnam, Malaysia, Singapore and the United States. Our manufacturing processes are highly complex and require sophisticated and costly equipment and a specially designed facility. As a result, any prolonged disruption in the operations of our manufacturing facilities could seriously harm our ability to satisfy our customer order deadlines. Restrictions on our access to or operation of manufacturing facilities or on our support operations or workforce, or similar limitations for our vendors and suppliers, may impact our ability to meet customer demand and could have a material adverse effect on our financial condition and results of operations. If we cannot timely deliver our systems, our results from operations and cash flows could be materially and adversely affected.

We arerecently implementingimplemented a new enterprise resource planning system. Our failure to implementeffectively it successfully, on timeoperate and onmaintain budgetthe new system could have a material adverse effect on us.

We arerecently in the process of completing a multi-year implementation ofimplemented a complex new enterprise resource planning (“ERP”) system.system and are continuing to make adjustments to the ERP implementations are complex, time-consuming, labor intensive,system and involveupdate substantialour expendituresbusiness on system software and implementation activities.processes. The ERP system is critical to our ability to provide important information to our management, obtain and deliver products, provide services and customer support, send invoices and track payments, fulfill contractual obligations, accurately maintain books and records, provide accurate, timely and reliable reports on our financial and operating results, and otherwise operate our business. ERP implementations also require transformation of business and financial processes in order to reap the benefits of the ERP system. Any such implementation involves risks inherent in the conversion to a new computer system, including loss of information and potential disruption to our normal operations. The implementation and maintenance of the new ERP system hashave required, and will continue to require, the investment of significant financial and human resources and the implementation may be subject to delays and cost overruns. In addition, we may notexperience bedifficulties ableas we continue to successfullyadjust completeto the implementation ofusing the new ERP system without experiencing difficulties.system. Any disruptions, delays or deficiencies in the design and implementation or the ongoing maintenance of the new ERP system could adversely affect our ability to process orders, ship products, provide services and customer support, send invoices and track payments, fulfill contractual obligations, accurately maintain books and records, provide accurate, timely and reliable reports on our financial and operating results, including reports required by the SEC such as the evaluation of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, and otherwise operate our business. Additionally, if we do not effectively implement the ERP system as planned or the system does not operate as intended, the effectiveness of our internal control over financial reporting could be adversely affected or our ability to assess it adequately could be delayed.

We operate in an industry that is highly competitive and subject to evolving industry standards, rapid technological changes, rapid changes in consumer demands and the rapid introduction of new, higher performance systems with shorter product life cycles. To be competitive in our demanding market, we must continually design, develop and introduce in a timely manner new lithography, inspection and metrology process control systemsproducts that meet the performance and price demands of semiconductorour device manufacturers.customers. We must also continue to refine our current systemsproducts so that they remain competitive. We expect to continue to make significant investments in our research and development activities and at times may make inventory investments prior to commercialization. We may experience difficulties or delays in our development efforts with respect to new systems, and we may not ultimately be successful in our product enhancement efforts to improve and advance products or in responding effectively to technological change, as not all research and development activities result in viable commercial products. In addition, we cannot provide assurance that we will be able to develop new products for the most opportunistic new markets and applications. Any significant delay in releasing new systemsproducts could cause our products to become obsolete, adversely affect our reputation, give a competitor a first-to-market advantage or cause a competitor to achieve greater market share. Our competitors may also develop products, including through the use of artificial intelligence,products that may have performance advantages over systems we currently offer or may offer in the future, which could similarly weaken our competitive position.

Inspection,Developing lithographyproducts andfor metrologythe productsemiconductor developmentindustry is inherently risky because it is difficult to foresee developments in semiconductor device manufacturing technology, coordinate technical personnel, and identify and eliminate system design flaws. Further, our products are leading edge and complex, and often the applications to our customers’ businesses are unique. Any new systems we introduce may not achieve or sustain a significant degree of market acceptance and sales.

Our future success and competitive position depend in part upon our ability to obtain and maintain proprietary technology for our principal product families. If we fail to adequately protect our intellectual property, it will give our competitors a significant advantage. We own or have licensed a number of patents relating to our metrology, lithography, wafer and defect inspection systems, as well as artificial intelligenceAI and machine learning systems, and software, including both embedded and application software, and have filed applications for additional patents. Any of our pending patent applications may be rejected, however, and we may be unable to develop additional proprietary technology that is patentable in the future. In addition, the patents that we do own or that have been issued or licensed to us may not provide us with competitive advantages and/or may be invalidated, rendered unenforceable and/or challenged by third parties. Third parties may also design around our patents or copy our patented inventions without our knowledge.

As part of our business, we store our data and certain data about our customers, vendors and employees in our information technology system. We also rely on our information technology system for business operations. If there is a breach as a result of third-party action, including through the use of artificial intelligence,AI, employee error, malfeasance, break-ins or otherwise, of our security measures designed to protect this information and prevent data loss and other security breaches, and someone obtains unauthorized access to our customers’, vendors’ or employees’ data or disrupts our access to our own data and systems, we could face loss of business, regulatory investigations or court orders or damage to our reputation, and we could be required to expend significant capital and other resources to alleviate the problem, as well as incur significant costs and liabilities, including due to litigation, indemnity obligations, damages for contract breach, penalties for violation of applicable laws or regulations, and costs for remediation and other incentives offered to customers.

The General Data Protection Regulation (“GDPR”) is a regulation in European Union (“EU”) law on data protection and privacy for the individuals within the EU and the European Economic Area (“EEA”). It also addresses the export of personal data outside the EU and EEA areas. The United Kingdom has adopted legislation that substantially implements the GDPR and provides for a similar penalty structure. We are also subject to the California Consumer Privacy Act of 2018 (“CCPA”) and the California Privacy Rights Act (“CPRA”), an amendment and expansion of the CCPA. We may also be subject to other data privacy laws in the United StatesStates, at both the state and federal levels, and the other countries in which we operate. In many cases, these laws apply not only to third-party transactions, but also to transfers of information between us and our subsidiaries, and among the subsidiaries and other parties with which we have commercial relations. The introduction of new products or expansion of our activities in certain jurisdictions may subject us to additional laws and regulations. These U.S. federal and state and foreign laws and regulations, including GDPR which can be enforced by private parties or government entities, are constantly evolving and can be subject to significant change. In addition, the application and interpretation of these laws and regulations, including GDPR, are often uncertain, particularly in our evolving industry, and may be interpreted and applied differently from country to country. Appropriate technical and organizational measures are necessary to implement these data protection principles. These laws and regulations can be costly to comply with and may delay or impede the development of new products, result in negative publicity, increase our operating costs, require significant management time and attention, or subject us to inquiries or investigations, claims or other remedies, including fines, which may be significant, or demands that we modify or cease existing business practices. A failure by us, our suppliers, or other parties with whom we do business to comply with posted privacy policies or with other federal, state, or international privacy-related or data protection laws and regulations, including GDPR, CCPA, CPRA and other new or changing privacy laws and regulations, could result in proceedings against us by governmental entities or others, which could have a material adverse effect on our business, results of operations, and financial condition.

We believe that onceOnce a semiconductor device manufacturer has selected one vendor’s capital equipment for a production-line application, the manufacturer generallytypically relies upon that capital equipment and, to the extent possible, subsequent generations of the same vendor’s equipment for the life of the application. Once a vendor’s equipment has been installed in a production line application, a semiconductor device manufacturer must often make substantial technical modifications and may experience production-line downtime in order to switch to another vendor’s equipment. Accordingly, unless our systems offer performance or cost advantages that outweigh a customer’s expense of switching to our systems, it will be difficult for us to achieve significant sales to that manufacturer once it has selected another vendor’s capital equipment for an application.

Additionally, over the last several years, the U.S. government has significantly expanded export controls on certain technologies and commodities to certain markets, particularly with respect to semiconductor and other high technology exports to China. For example, the U.S. Department of Commerce (“DoC”) has imposed export controls on the transfer of certain U.S. products and technologies to “military end users” in China, as well as restrictions on the transfer of U.S. products to certain companies, including Huawei Technologies Co., Ltd., and its affiliates. Most recently, in 2022, the DoC imposed new export controls related to the Chinese semiconductor manufacturing, advanced computing, and supercomputer industries. In 2022,2023, 2024 and 2025, the DoC revised and expanded the 2022 export controls and added new controls. The DoC has also added a number of companies in China to the Unverified List and Entity List of the Export Administration Regulations (“EAR”), including Yangtzemajor Memorybuyers Technologiesof Co.,semiconductor Ltd (YMTC).equipment. In October 2023, as well as 2024 and earlySeptember 2025, the DoC revised and expandedinstituted the 2022“50% exportRule” controls.(also known as the “Affiliates Rule”), which applied Entity List restrictions to affiliates of listed entities. The 50% rule added thousands of companies to the entity list. The implementation of the rule was ultimately suspended for a year until November 2026, but could be reinstated before then.

The effect of these changes, among others, is that Onto Innovation is required to conduct additional end-use diligence and in some instancesinstances, obtain export licenses before providing products to certain customers. There can be no assurance that export licenses applied for by us or our customers will be granted in a timely manner or at all. We have experienced and may continue to experience a temporary loss of revenues while we are obtaining licenses with certain customers affected by export controls. Failure to obtain any required license could result in a reduction of anticipated revenues until we are able to replace unlicensed orders with other customer orders for which a license has been obtained or is not required, and there can be no assurance that replacement orders will be obtained on favorable terms, in a timely manner, or at all. In addition, any licenses that are granted to us or to our customers may have a short duration or require us to satisfy various conditions, and it is possible that licenses that have been granted may be revoked or we may not be successful in obtaining reissuance of such licenses upon their expiration or in the event modifications are required to a previously issued license. Any of these occurrences could have a material adverse effect on our revenues, business, financial condition and results of operations. Further, we hold inventory of products that may be affected by these recent U.S. government actions, including potential order cancellations. If the sale of these products is delayed or we are unable to return or dispose of our inventory on favorable economic terms, we may incur additional carrying costs for the inventory or otherwise record charges associated with this inventory.

The administrative processing, attendant delays and risk of ultimately not obtaining required export approvals also put us at a disadvantage relative to our non-U.S. competitors who may not be required to comply with U.S. export controls. ThisThese difficultydifficulties and uncertaintyuncertainties hashave adversely affected our ability to compete for and win business from domestic customers in China.

It is possible that the U.S. government will impose additional export controls on our products or systems, which could lead to further revenue losses. For example, it remains uncertain what changes, if any,whether the newcurrent U.S. presidential administration will make additional changes with respect to U.S. export control policy. Any such changes could result in additional restrictions on our ability to sell products to customers in China and other jurisdictions. Foreign customers affected by current or future U.S. government sanctions, controls or threats of sanctions or controls may respond by developing their own solutions to replace our products or by utilizing our foreign competitors’ products (who are not subject to the same export controls and can fulfill the orders). In addition, these export controls may also reduce overall global demand for our customers’ products or for other products produced or manufactured in the U.S. or based on U.S. technology, in turn reducing demand for our products, which could have a material adverse effect on our business, financial condition and results of operations. Increased restrictions on China exports may also lead to regulatory retaliation by the Chinese government, which may adversely impact our business. International trade disputes could result in increases in tariffs and other trade restrictions and protectionist measures that could adversely impact our operations and reduce the competitiveness of our products relative to local and global competitors.

We are faced with various risks that may be associated with our compliance with existing, new, different, inconsistent or conflicting laws, regulations and rules enacted by governments and/or their regulatory agencies in the countries in which we operate as well as rules and policies implemented at our customer sites. These laws, regulations, rules and policies could relate to any of an array of issues including, but not limited to, environmental, tax, intellectual property, trade secrets, product liability, contracts, antitrust, employment, securities, import/export and unfair competition. The cost of maintaining compliance under multiple and changing regulatory regimes may adversely affect our business, financial condition and results of operations, and, in the case of export controls, has adversely affected and may continue to adversely affect our results of operations. As discussed herein under the heading “Tariffs, export regulations, and other market barriers have impacted and may continue to impact our ability to compete for the business of domestic customers in China and other jurisdictions, which has adversely affected and may continue to adversely affect our,our business, financial condition and results of operations,” the U.S. government issued new export control rules between 2022 and 2025 aimed at restricting China’s access to semiconductor equipment and advanced computing technology, among other things. To comply with the new rules, Onto Innovation has had to expend time and resources that might otherwise have been used for revenue generating activities. Further regulatory changes could require additional diversion of resources to compliance efforts. In addition, in the event that we fail to comply with or violate U.S. or foreign laws or regulations or customer policies, we could be subject to civil or criminal claims or proceedings that may result in monetary fines, penalties or other costs against us or our employees, which may adversely affect our operating results, financial condition, customer relations and ability to conduct our business.

In addition, due to the complex relationships among China, Hong Kong, Taiwan, and the United States, there is risk that political, diplomatic, and national security influences might lead to further trade, technology, or capital disputes, or disruptions affecting the semiconductor industry. In particular, the escalation of geopolitical tensions between China and Taiwan may cause disruptions in the markets in which we operate and lead to a decreased demand for our products, which could adversely affect our business in Asia or have a negative impact on the regional or global economy.

Our business may also be affected by public health issues (for example, an outbreak of a contagious disease such as COVID-19, avian influenza, measles or Ebola). The effects of a public health crisis may affect our operations and those of our suppliers, third-party service providers, and customers. The extent to which the economic effects of a public health crisis could impact our business, results of operations, and financial conditions are difficult to predict, and depend on numerous evolving factors including any future resurgences of the public health crisis and the intensity and duration of any resulting adverse macroeconomic conditions. A public health crisis could expose our business, results of operations, and financial condition to the following adverse impacts: disruptions to our supply chain in connection with the sourcing of materials, support, and services; disruption of operations due to unavailability of employees as a result of illness, travel restrictions and other factors; and a decrease in demand for our products;products. AdditionalAny sustained or prolonged public health crises, or any ongoing, worsening or recurring supply chain disruptions or macroeconomic effects of such crises could have a material adverse effect on our business, results of operations, legal exposure, or financial condition and may also heighten many of the other risks described in this “Risk Factors” section.

There may also be conflict or uncertainty in the countries in which we operate, including safety issues, , disruptions of service from utilities, nuclear power plant accidents or general economic or political unrest, including war, civil unrest or terrorist attacks. WeWhile havecurrent noglobal material operations in Russia, Belarus, Ukraine, or Israel. Consequently, to date, our operationsconflicts have not been materially adversely affected byour Russia’sbusiness, invasion of Ukraine,new or the Israel-Hamas conflict. However, if the Russia-Ukraine conflict and/or theexpanding conflicts in Israel and Gaza and the surrounding area escalate further, and/or the U.S. or other jurisdictions impose additional sanctions on the governments or entities involved, this could result in disruptions to the global economy and/or supply chains that could materially adversely affect our business.

As a global company, we are subject to taxation in the United States and various other countries. Significant judgment is required to determine and estimate worldwide tax liabilities. Our future annual and quarterly tax rates could be affected by numerous factors, including changes in the (1) applicable tax laws; (2) composition of earnings in countries with differing tax rates; or (3) recoverability of our deferred tax assets and liabilities. Due to the pace of legislative changes and the scale of our business activities, any substantial changes in tax policies or legislative initiatives may materially and adversely affect our business, the taxes we are required to pay, our financial position, and results of operations. For example, beginning in 2022, the U.S. Tax Cuts and Jobs Act of 2017 (“TCJA”) eliminated the existing option to deduct U.S. domestic and foreign research and development expenditures on the U.S. tax returns and requiresrequired taxpayers to capitalize and amortize them over five yearsand fifteen years, respectively, pursuant to IRC Section 174. The requirement reduced our cash flows for 2022, 2023 and 2024,2024. On July 4, 2025, the U.S. enacted tax reform legislation through the One Big Beautiful Bill Act that allows for the immediate expensing of domestic U.S. research and maydevelopment continueexpenses, although the Company continues to reducecapitalize ourand cashamortize flows.foreign research and development costs on the U.S. tax return. In addition, any changes to U.S. and global corporate income tax laws, including increasing U.S. taxation of international business operations and imposing a global minimum tax could have a negative impact on our tax position in the future. Many countries and organizations, such as the Organization for Economic Cooperation and Development (“OECD”), which is discussed further below, are also actively considering changes to existing tax laws or have proposed or enacted new laws that could increase our tax obligations in countries where we do business or cause us to change the way we operate our business. Any of these developments or changes in federal, state, or international tax laws or tax rulings could adversely affect our effective tax rate and our results of operations.

The OECD has released guidance covering various topics, including country-by-country reporting, definitional changes to permanent establishment and Base Erosion and Profit Shifting (“BEPS”), an initiative that aims to standardize and modernize global tax policy. The guidance also established a global minimum tax of 15%. This guidance has been implemented by several jurisdictions, including jurisdictions in which we operate, and many other jurisdictions are in the process of implementing it. Depending on the final form of legislation ultimately enacted, there may be significant consequences for us due to our international business activities, including, but not limited to, an increase in our tax uncertainty and adverse effects on our provision for income taxes. TheOn U.S.January presidential5, administration has directed2026, the U.S.OECD Departmentannounced that the Inclusive Framework on Base Erosion and Profit Shifting agreed to a new package of Treasuryadministrative to develop options for “protective measures” in response to tax rules imposed by non-U.S. countries that are extraterritorial or disproportionately affect U.S. companies (which may include taxes imposedguidance under the OECDPillar Two global minimum tax rules. The new administrative guidance) andallows legislationfor hasU.S. beenmultinationals introducedto provide for a Side-by-Side Safe Harbor that would increaseexclude U.S.-parented multinational groups from the global minimum tax rule’s Income Inclusion Rule and Undertaxed Profits Rule on the grounds that the existing U.S. taxlaw ratesis onsufficiently non-U.S.robust companiesin its taxation of domestic and investorsforeign ifprofits. theirAlthough homewe jurisdictionswill imposecontinue discriminatoryto or extraterritorial taxes onmonitor U.S. companies,and butinternational legislative developments in this area, we cannot predict whether such protective measures or legislation will be adopted orby what,non-U.S. countries, if any, and whether the U.S. would have any responsive measures will be adopted by non-U.S. countries.measures.

We are subject to various environmental laws and regulations that could impose substantial costs upon us, and failure to comply with such laws and regulations may harmimpact our business, operating results and financial condition.

Some of our operations use substances regulated under various federal, state, local, and international laws governing the environment, including those relating to the storage, use, discharge, disposal, labeling, and human exposure to hazardous and toxic materials. We could incur costs, fines and civil or criminal sanctions, third-party property damage or personal injury claims, or could be required to incur substantial investigation or remediation costs, if we were to violate or become liable under environmental laws. Liability under environmental laws can be joint and several and without regard to comparative fault. Compliance with current or future environmental laws and regulations could restrict our ability to expand our facilities or require us to acquire additional expensive equipment, modify our manufacturing processes, or incur other significant expenses. For example, we are, or may become subject to various new or proposed climate-related and other sustainability laws and regulations, including, for example, the state of California’s new climate change disclosure requirements,requirements and the EU’s new Corporate Sustainability Reporting Directive and proposed climate-change disclosure requirements from the SEC.Directive. Compliance with such laws and regulations, as well as any increased focus or scrutiny from the SEC and other regulators, investors, customers, vendors, employees, and other stakeholders concerning sustainability and climate matters, could impose additional costs on us. We may unintentionally violate environmental laws or regulations in the future as a result of human error, equipment failure or other causes. In addition to the potential adverse effects on our business operations of such an event, we are committed to maintaining safe working conditions for our employees and sourcing, manufacturing, and distributing our products in a responsible and environmentally friendly manner, and any failure on our part to do so may cause reputational harm for the Company.

We target our products to address the needs of microelectronicsemiconductor device manufacturers for defect inspection, metrology and lithography.manufacturers. If for any reason the market for microelectronic device inspection, lithography or metrology equipmentproducts fails to grow in the long term, we may be unable to maintain current revenue levels in the short term and maintain our historical growth in the long term. Growth in the inspection market is dependent to a large extent upon microelectronicsemiconductor manufacturers replacing manual inspection with automated inspection technology. Growth in the metrology market is dependent to a large extent upon new chip designs and capacity expansion of microelectronic manufacturers. Growth in the lithography market is dependent on the development of cost-effective packaging with high fine pitch RDLs, ultimately migrating to multi-die, large, form-factor packages. There can be no assurance that manufacturers will undertake these actions at the rate we expect.

Our products and services are used by our customers who manufacture many types of ICs for a multitude of applications, each having unique manufacturing challenges. This includes ICs to enable information processing and management (logic ICs), memory storage (NAND, 3D-NAND, NOR, and DRAM), analog devices (e.g., Wi-Fi and 5G radio ICs, power devices), MEMS sensor devices (accelerometers, pressure sensors, microphones), image sensors, and other end markets including components for artificial intelligence,AI, hard disk drives, LEDs, and power management.

Gross profit as a percentage of revenue increaseddecreased to 49.7% for fiscal 2025 compared to 52.2% for fiscal 2024 compared to 51.5% for fiscal 2023.2024. This was primarily driven by anwrite-downs increaseof in volumeexcess and changeobsolete ininventory, productrestructuring mix, partially offset by write-downscosts related to theinfrastructure impairmenttransition and exitcosts ofrelated certainto lithographycontract inventorymanufacturing set-up in fiscal 2024.2025.

The increase in operating expenses in fiscal 20242025 compared to fiscal 20232024 was primarily due to increasesincreased inrestructuring researchexpenses, transaction and development,amortization and sales and marketing expensescosts related to increasedthe headcount and compensation costs, project costs, travel expenses and write-offacquisition of purchasedSemilab in processUSA, research and development assets.project costs and compensation cost.

Our cash, cash equivalents and marketable securities balance increaseddecreased to $639.6 million at the end of fiscal 2025 from $852.3 million at the end of fiscal 2024 from $697.8 million at the end of fiscal 2023.2024. This increasedecrease was primarily the result of $245.7 million of cash generated from operating activities, partially offset by cash used for capital expenditures of $31.9 million, acquisitions of $26.8$436.1 million, purchases of common stock of $25.1$75.0 millionmillion, andcapital $19.0 millionexpenditures of cash$28.5 usedmillion, $13.5 million for tax payments related to net share settlement of employee stock-based compensation plans and purchase of non-marketable equity securities of $8.0 million, partially offset by $328.3 million of cash generated from operating activities and $13.4 million of cash from issuance of shares through share-based compensation plans.

Revenue. Our revenue is derived from the sale of our systems and software, spare parts, and services. Our revenue was $987.3$1,005.3 million, $815.9$987.3 million and $1,005.2$815.9 million for the years ended January 3, 2026, December 28, 2024,2024 and December 30, 2023 and December 31, 2022,2023, respectively. This represents an increase of 21.0%2% from 2024 to 2025 and an increase of 21% from 2023 to 2024 and a decrease of 18.8% from 2022 to 2023.2024.

Gross Profit. Our gross profit has been and will likely continue to be affected by a variety of factors, including manufacturing efficiencies, provision for excess and obsolete inventory, pricing by competitors or suppliers, new product introductions, production volume, inventory step-up from purchase accounting, customization and reconfiguration of systems, international and domestic sales mix, system and software product mix, and parts and services margins. Our gross profit was $515.3$499.8 million, $420.3$515.3 million and $539.2$420.3 million for the years ended January 3, 2026, December 28, 2024, and December 30, 2023, and December 31, 2022, respectively. Our gross profit represented 52.2%,49.7%, 51.5%52.2% and 53.6%51.5% of our revenue for the years ended January 3, 2026, December 28, 2024, and December 30, 2023, respectively. The decrease in gross profit as a percentage of revenue from 2024 to 2025 was primarily due to restructuring and Decemberother 31,expenses 2022,for respectively.the write down of excess and obsolete inventory. The increase in gross profit as a percentage of revenue from 2023 to 2024 was primarily due to an increase in revenue volume and change in product mix, partially offset by write-downs related to the impairment and exit of certain lithography inventory. The decrease in gross profit as a percentage of revenue from 2022 to 2023 was primarily due to decreased revenue volume, unfavorable product mix, and increased manufacturing costs due to inflationary pressures during the 2023 fiscal period.

Research and Development. We believe that it is critical to continue to make substantial investments in research and development to ensure the availability of innovative technology that meets the current and projected requirements of our customers’ most advanced designs. We have maintained, and intend to continue, our commitment to investing in research and development in order to continue to offer new products and technologies. Accordingly, we devote a significant portion of our technical, management and financial resources to research and development programs. Research and development expenditures consist primarily of salaries and related expenses of employees engaged in research, design and development activities. They also include consulting fees, the cost of related supplies and legal costs to defend our intellectual property. Our research and development expenses were $116.8$132.0 million, $104.4$113.9 million and $112.0$104.4 million in fiscal years 2024,2025, 20232024 and 2022,2023, respectively. The year-over-year dollar increase from 2024 through 2025 was primarily due to increases in compensation costs, production expenses and depreciation and amortization. The year-over-year dollar increase from 2023 through 2024 was primarily due to write-offincrease of acquired in-process research and development of $4.0 million and increasedin compensation costs of $1.6 million,costs, outside services costs of $3.3 million,costs, product development costs of $1.9 million,costs, travel costs of $0.6 million,costs, research and development project costs of $0.5 million,costs, freight and duty costs of $0.2 millioncosts, and depreciation expenses of $0.2 million. The year-over-year dollar decrease from 2022 through 2023 was primarily due to decreases of $4.6 million for the write-off of acquired in-process research and development assets and cost containment initiatives of $3.3 million, partially offset by increases in depreciation expenses of $0.6 million and travel expenses of $0.3 million.expenses. We continue to maintain our commitment to investing in new product development and enhancement to existing products.

Sales and Marketing. Sales and marketing expenses are primarily comprised of salaries and related costs for sales and marketing personnel, as well as commissions and other non-personnel related expenses. Our sales and marketing expenses were $76.2$70.0 million, $61.8$76.0 million and $65.7$61.8 million in fiscal years 2024,2025, 20232024 and 2022,2023, respectively. The year-over-year dollar decrease from 2024 through 2025 was primarily due to decreases in compensation costs, outside services and fees, and facilities expenses. The year-over-year dollar increase from 2023 through 2024 was primarily due to increases in total compensationcompensations costs of $13.0 million,costs, travel costs of $0.7 million,costs, outside servicesservice costs of $0.3 million,costs, sales and marketing costs of $0.3 million and production expenses of $0.1 million. The year-over-year dollar decrease from 2022 through 2023 was primarily due to a decrease in total compensation costs of $1.5 million on lower headcount and variable compensation plan elements, a decrease in outside service expenses of $0.8 million and a decrease in depreciation expense of $0.7 million, partially offset by an increase in travel expenses of $0.3 million.expenses.

General and Administrative. General and administrative expenses are primarily comprised of salaries and related costs for general administrative personnel, as well as other non-personnel related expenses. Our general and administrative expenses were $85.8$107.1 million, $83.1$79.9 million and $69.6$79.6 million in fiscal years 2024,2025, 20232024 and 2022,2023, respectively. The year-over-year dollar increase from 2024 through 2025 was primarily due to increases in compensation costs, outside services and fees, travel costs, facilities expenses, and other general expenses. The year-over-year dollar increase from 2023 through 2024 was primarily due to increases in depreciation expense of $1.8 million andexpense, facilities expense of $1.4 million,and partially offset by a decrease in freight and duty costs of $0.5 million. The year-over-year dollar increase from 2022 through 2023 was primarily due increased litigation expenses of $7.4 million, restructuring charges of $3.6 million for employee severance costs during the 2023 period, an increase in depreciation expense of $1.9 million and an increase in facilities expenses of $0.4 million.costs.

Amortization of Identifiable Intangible Assets. Amortization of identifiable intangible assets, primarily purchased technology, was $49.4$39.4 million, $54.8$49.4 million and $55.3$54.8 million in fiscal years 2024,2025, 20232024 and 2022,2023, respectively. The consecutiveyear-over-year dollar decrease from 2024 to 2025 was due to certain assets becoming fully amortized, partially offset by Semilab USA amortization of $5.6 million. The year-over-year dollar decreasesdecrease from 20222023 through 2024 were primarilywas due to certain assets becoming fully amortized.

Our working capital was $1,049.1 million at January 3, 2026 and $1,307.4 million at December 28, 2024 and $1,135.5 million at December 30, 2023.2024.

We used $226.5$121.6 million, $103.4$226.5 million and $55.7$103.4 million of cash in investing activities in fiscal 2024,2025, 20232024 and 2022,2023, respectively. Capital expenditures, net of proceeds in fiscal 2024,2025, 2024 and 2023 and 2022 were $31.9$28.5 million, $19.8$31.9 million and $18.4$19.8 million. Capital expenditures were primarily for enterprise resource planning systems implementation, investments in facility improvements, demonstration and testing equipment, manufacturing and network equipment. PurchasesProceeds from sales and maturities of marketable securities, net of purchases of marketable securities was $351.1 million for fiscal 2025, purchases of marketable securities, net of proceeds from sales and maturities of marketable securities, for fiscal 2024, 20232024 and 20222023 was $167.9 million, $83.6 million and $4.6$83.6 million, respectively. Net cash paid for acquisitions in fiscal 20242025 and 20222024 was $26.8$436.1 million and $4.6$26.8 million, respectively. There were no acquisitions in fiscal 2023.

We used $35.7$75.1 million, $9.5$35.7 million and $68.4$9.5 million of cash in financing activities for fiscal 2024,2025, 20232024 and 2022,2023, respectively. Purchases of our common stock were $25.1$75.0 million, $3.2$25.1 million and $65.3$3.2 million in fiscal 2024,2025, 20232024 and 2022,2023, respectively. Tax withholding payments for vested equity awards, partially offset by proceeds from sales of shares through share-based compensation plans were $9.9$0.1 million, $5.5$9.9 million and $0.8$5.5 million for fiscal 2024,2025, 20232024 and 2022,2023, respectively. Payments for contingent consideration for acquired business were $0.7 million, $0.8 million and $2.3$0.8 million in fiscal 2024, 20232024 and 2022.2023, respectively. There were no payments of contingent consideration for acquired business in fiscal 2025.

We have a credit agreement with a bank that provides for a variable-rate line of credit that is secured by the marketable securities we have with the bank. We are permitted to borrow up to 70% of the value of eligible securities held at the time the line of credit is accessed, up to a maximum of $100 million. As of DecemberJanuary 28,3, 2024,2026, the available line of credit was approximately $100.0 million with an available interest rate of 6.2%.4.3%. The credit agreement is available to us until such time that either party terminates the arrangement at its discretion. As of the date of this filing, we have not utilized the line of credit.

Our future capital requirements will depend on many factors, including the timing and amount of our revenue and our investment decisions, which will affect our ability to generate additional cash. We expect that our existing cash, cash equivalents, marketable securities and availability under our line of credit will be sufficient to meet our anticipated cash requirements for working capital, capital expenditures and other cash needs for the next 12 months following the filing of this Form 10-Q.10-K. Thereafter, if cash generated from operations and financing activities is insufficient to satisfy our working capital requirements, we may seek additional funding through bank borrowings, sales of securities or other means. In addition, a reduction in or volatility with respect to our stock price or a general market downturn could materially impact our ability to sell securities on favorable terms or at all. There can be no assurance that we will be able to raise any such capital on terms acceptable to us or at all.

The following table summarizes our significant contractual obligations at DecemberJanuary 28,3, 2024,2026, and the effect such obligations are expected to have on our liquidity and cash flows in future periods. We are currently unable to provide a reasonably reliable estimate of the amount or periods when cash settlement of this liability may occur.

Inventory Valuation. Inventories are stated at the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less predictable costs of completion, disposal and transportation. Cost is generally determined on a first-in, first-out basis, and includes material, labor and manufacturing overhead costs. We review and set standard costs as needed, but at a minimum, on an annual basis, at current manufacturing costs in order to approximate actual costs. We maintain reserves for our excess and obsolete inventory equal to the difference between the cost of inventory and the estimated market value based upon assumptions about future product lifecycles, product demand and market conditions. If actual product lifecycles, product demand and market conditions are less favorable than those originally projected by management, additional inventory write-downs may be required.

There have been no material changes from the risk factors previously disclosed under the heading “Risk Factors” in the 2025 Form 10-K, as updated by the risk factors previously disclosed under the heading “Risk Factors” in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2026, filed with the SEC on May 5, 2026, except as set forth below. We may disclose additional changes to risk factors or additional factors from time to time in our future filings with the SEC.

Forward-looking statements contained herein reflect our current expectations, assumptions and projections with respect to future events and are subject to certain risks, uncertainties and assumptions. Actual results may differ materially and adversely from those included in such forward-looking statements as a result of various factors, including risks and uncertainties, many of which are beyond Onto Innovation’s control. Such factors include, but are not limited to, the Company’s ability to leverage its resources to improve its position in its core markets; its ability to weather difficult economic environments; its ability to open new market opportunities and target high-margin markets; the strength/weakness of the back-end and/or front-end semiconductor market segments; fluctuations in customer capital spending; the Company’s ability to effectively manage its supply chain and adequately source components from suppliers to meet customer demand; the effects of political, economic, legal, and regulatory changes or uncertainties, changes in U.S. tariff and trade policy and related retaliatory actions, and geopolitical conflicts, including the ongoing conflict involving Israel, the U.S., Iran and other actors, on the Company’s global operations; the Company’s ability to adequately protect its intellectual property rights and maintain data security; the effects of natural disasters or public health emergencies on the global economy and on the Company’s customers, suppliers, employees, and business; its ability to effectively maneuver global trade issues and changes in trade and export regulations, tariffs and license policies; the Company’s ability to maintain relationships with its customers and manage appropriate levels of inventory to meet customer demands; the Company’s ability to realize the anticipated benefits of the proposed investment in and strategic partnership with Rigaku; the Company’s ability to complete the proposedRigaku transactionTransaction on the timing expected or at all; the ability to obtain required regulatory approvals for the proposed transaction on the timing expected or at all; the availability of debt financing for the transaction; the Company’s timing and ability to repayrealize itsthe debtanticipated benefits of the Rigaku Transaction; and the Company’s ability to successfully integrate acquired businesses and technologies, including the business of Semilab USA and to realize the anticipated benefits of such acquisitions. Additional information and considerations regarding the risks faced by Onto Innovation are available in our Annual Report on Form 10-K for the fiscal year ended January 3, 2026 (the “2025 Form 10-K”) filed with the Securities and Exchange Commission (the “SEC”) on February 24, 2026, in Part II, Item 1A. “Risk Factors” and elsewhere in this Form 10-Q, and in the other filings that we make with the SEC from time to time. Forward-looking statements reflect our position as of the date of this Form 10-Q and we undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Our principal market is semiconductor capital equipment. Semiconductors packaged as ICs,integrated circuits (“ICs”), or “chips,” are used in consumer electronics, server and enterprise systems, mobile computing (including smart phones and tablets), data storage devices, and embedded automotive and control systems. Our core focus is the measurement and control of the structure, composition, and geometry of semiconductor devices as they are fabricated on silicon wafers to improve device performance and manufacturing yields.

Operating expenses for the MarchJune 2026 quarter increased by 2.7%6.1% compared to the JanuaryMarch 2026 quarter. This increase was driven by anhigher increasecompensation-related incosts, intangibleincreased amortizationheadcount, expense,and offsetengineering by reductions in transaction costsspend related to theproduct acquisitiondevelopment of Semilab USA.activities.

Our cash, cash equivalents and marketable securities balance increased to $654.2$1.9 millionbillion at MarchJune 31,30, 2026, compared to $639.6 million at January 3, 2026. This increase was primarily the result of $26.3$1.2 billion of cash provided by financing activities and $87.8 million of cash generated from operating activities partially offset by capital expenditures of $3.6$7.2 million and $6.7 million for tax payments related to net share settlement of employee stock-based compensation plans.million. Employee headcount at MarchJune 31,30, 2026 was approximately 1,790.1,867.

On April 20, 2026, we entered into a definitive share purchase agreement (the “Rigaku Transaction”) with Atom Investment, L.P., an affiliate of The Carlyle Group, to acquire 27% of the outstanding common stock of Rigaku Holdings Corporation (“Rigaku”) for approximately $710 million. The Rigaku Transaction is expected to close in the second half of 2026. Also on April 20, 2026, we entered into a commitment letter with Goldman Sachs Bank USA, which provides for a senior secured 364-day $500 million bridge term loan credit facility.facility (the “Bridge Commitment”). The bridgeBridge termCommitment loan iswas intended to be available to the Company to finance, together with other sources of funds, the Rigaku Transaction and related fees and expenses on or prior to the closing of the Transaction. On May 21, 2026, we terminated the Bridge Commitment, incurring total costs of $4.4 million.

Results of Operations for the Three-MonthsThree and Six Months ended MarchJune 31,30, 2026 and MarchJune 29,28, 2025

Revenue. Our revenue is primarily derived from the sale of our systems, software licensing, services and spare parts. Our revenue of $291.9$343.1 million increased 9.5%35.3% for the three months ended MarchJune 31,30, 2026 as compared to the three months ended MarchJune 29,28, 2025, for which revenue totaled $266.6$253.6 million. For the six months ended June 30, 2026 and June 28, 2025, our revenue totaled $635.1 million and $520.2 million, respectively, representing a year-over-year increase of 22.1%.

Total systems and software revenue increased $16.0$79.5 million, and $95.5 million for the three and six months ended MarchJune 31,30, 2026, respectively, as compared to the three and six months ended MarchJune 29,28, 2025.2025, respectively. The increase was attributable to Semilabstronger USAdemand revenuesfor ofinspection $24.0and million,metrology as well as higher sales to advanced packaging customers, partially offset by a decline in sales to advanced node customers.systems. The increase in total parts and services revenue for the three and six months ended MarchJune 31,30, 2026, as compared to the three and six months ended MarchJune 29,28, 2025, was primarily due to increasedhigher spendingcustomer bysupport our customers on system upgradesactivity and repairsservice ofcontract existing systems.revenue.

The decreaseincrease in gross profit as a percentage of revenue for the three and six months ended MarchJune 31,30, 2026 as compared to the three and six months ended MarchJune 29,28, 2025 was primarily due to increased sales of newer product lines with higher restructuringstandard andmargins. otherThe expensesincrease for the writethree downmonth ofperiod excessalso andbenefited obsoletefrom inventorylower inrestructuring expenses compared to the 2026prior year period. In addition, $6.1 million of inventory step-up amortization attributed to Semilab USA was recognized during the three months ended March 31, 2026.

Research and Development. We believe that it is critical to continue to make substantial investments in research and development to ensure the availability of innovative technology that meets the current and projected requirements of our customers’ most advanced designs. We have maintained and intend to continue our commitment to investing in research and development in order to continue to offer new products and technologies. Accordingly, we devote a significant portion of our technical, management and financial resources to research and development programs. Research and development expenditures consist primarily of salaries and related expenses of employees engaged in research, design and development activities. These expenditures also include consulting fees, the cost of related supplies and legal costs to defend our patents. Our research and development expenses were $35.1$38.9 million and $73.9 million for the three-monththree periodand six month periods ended MarchJune 31,30, 2026, as compared to $28.0$35.3 million and $63.3 million for the three-monththree periodand six month periods ended MarchJune 29,28, 2025. The increase in research and development expenses for the three-monththree month period ended MarchJune 31,30, 2026, as compared to the three-monththree month period ended MarchJune 29,28, 2025 was primarily due to increaseshigher incompensation-related costs driven by stock-based compensation expense and increased headcount, as well as increased materialsengineering spend associated with product development activities. The increase in research and suppliesdevelopment expensed.expenses for the six-month period ended June 30, 2026, as compared to the six-month period ended June 28, 2025 was primarily due to higher compensation-related costs driven by stock-based compensation expense and increased headcount, as well as higher engineering spend associated with product development activities.

Sales and Marketing. Sales and marketing expenses are primarily comprised of salaries, commissions and related costs for sales and marketing personnel, as well as other non-personnel related expenses. Our sales and marketing expenses were $21.5$23.1 million and $44.6 million for the three-monththree periodand six month periods ended MarchJune 31,30, 2026, compared to $19.7$14.9 million and $34.6 million for the three-monththree periodand six month periods ended MarchJune 29,28, 2025. The increase in sales and marketing expenses for the three-monththree month period ended MarchJune 31,30, 2026, as compared to the three-monththree month period ended MarchJune 29,28, 2025, was primarily driven by increaseshigher compensation-related costs and increased headcount to support higher sales activity. The increase in headcount.sales and marketing expenses for the six-month period ended June 30, 2026, as compared to the six-month period ended June 28, 2025, was primarily driven by higher compensation-related costs, increased headcount and higher selling costs associated with increased revenue and customer activity.

General and Administrative. General and administrative expenses are primarily comprised of salaries and related costs for corporate and administrative personnel, as well as other non-personnel related expenses. Our general and administrative expenses were $31.4$34.3 million and $65.7 million for the three-monththree periodand six month periods ended MarchJune 31,30, 2026, as compared to $22.8$25.0 million and $47.8 million for the three-monththree periodand six month periods ended MarchJune 29,28, 2025. The increase in general and administrative expenses for the three-monththree month period ended MarchJune 31,30, 2026, as compared to the three-monththree month period ended MarchJune 29,28, 2025, was primarily driven by higher headcount-relatedcompensation-related costs, including stock-based compensation expense. The increase in general and administrative expenses for the six-month period ended June 30, 2026, as compared to the six-month period ended June 28, 2025, was primarily driven by higher compensation-related costs, expensesincluding costs associated with the Semilab USA integration, ERP integration costs, related outside services and fees and other general corporate expenses.integration.

Amortization of Identifiable Intangible Assets. Amortization of identifiable intangible assets was $19.7 million and $39.4 million for the three-monththree periodand six month periods ended MarchJune 31,30, 2026, compared to $8.4 million and $16.9 million for the three-monththree periodand six month periods ended MarchJune 29,28, 2025. The increase in amortization of identifiable intangible assets for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 29,28, 2025, was due to recognitionSemilab USA amortization. The increase in amortization of aidentifiable fullintangible quarterassets for the six months ended June 30, 2026, as compared to the six months ended June 28, 2025, was due to amortization in connection with the acquisition of Semilab USA amortization in the 2026 period.USA.

Restructuring and Other. Restructuring and other expenses were $5.2$3.8 million and $8.9 million for the three-monththree and six-month period ended MarchJune 31,30, 2026, compared to $1.1$6.2 million and $7.3 million for the three-monththree periodand six month periods ended MarchJune 29,28, 2025. The increase in restructuring and other expenses for the three-monththree month period ended MarchJune 31,30, 2026, as compared to the three-monththree month period ended MarchJune 29,28, 2025, and for the six month period ended June 30, 2026, as compared to the six month period ended June 28, 2025, was primarily due to an increase in employee severance costs and business transformation projects that includes the streamlining of various operating activities.projects.

Total other income, net. Total other income, net was $4.5$4.9 million and $9.5 million for the three-monththree periodand six month periods ended MarchJune 31,30, 2026, as compared to $8.5$7.5 million and $16.0 million for the three-monththree periodand six month periods ended MarchJune 29,28, 2025. The decrease in total other income, net for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 29,28, 2025, and for the six months ended June 30, 2026, as compared to the six months ended June 28, 2025, was attributable to interestexpenses onassociated lowerwith cashincreased capital markets activity and marketablefees securitiesrelated balances into the 2026Bridge periodCommitment, followingas thewell useas amortization of cashdebt forissuance the acquisition of Semilab USA in the fourth quarter of 2025, partially offset by lower foreign currency exchange losses recognized in the 2026 period.costs.

Income Taxes. We recorded an income tax provision of $4.3$8.4 million and $12.7 million for the three-monththree periodand six month periods ended MarchJune 31,30, 2026, as compared to $7.6$5.8 million and $13.4 million for the three-monththree periodand six month periods ended MarchJune 29,28, 2025. Our effective tax rate of 11.3%12.3% and 10.6%11.9% for the three-monththree and six month periods ended June 30, 2026 and our effective tax rate of 14.7% and 12.0% for the three month period ended MarchJune 31, 2026 and the three-month period ended March 29,28, 2025, respectively, differed from the statutory rate of 21.0%, primarily due to the tax benefit associated with the Foreign Derived Intangible Income (“FDII”) deductions, federal research and development tax credits, and excess tax benefits associated with equity compensation.

Net cash and cash equivalents provided by operating activities for the threesix months ended MarchJune 31,30, 2026 was $26.3$87.8 million. The net cash and cash equivalents provided by operating activities during the threesix months ended MarchJune 31,30, 2026 resulted primarily from net income, adjusted to exclude the effect of non-cash operating charges, of $67.9$76.4 million. Significant non-cash operating charges included depreciation, amortization, share-based compensation and provision for inventory valuation. Cash provided by operating activities for the first threesix months of 2026 decreased compared to the corresponding period in fiscal 2025, primarily due to timing of accounts receivable payments and higher inventory levels driven by revenue growth, partially offset by increased in accounts payable and accrued expense due to revenuethe growth.timing of vendor payments and higher operational activity.

Net cash and cash equivalents used in investing activities for the threesix months ended MarchJune 31,30, 2026 was $112.6$342.8 million. During the threesix months ended MarchJune 31,30, 2026, net cash and cash equivalents used in investing activities included purchases of marketable securities of $179.5$652.1 million and capital expenditures of $3.6$7.2 million, partially offset by proceeds from maturities and sales of marketable securities of $70.5$316.6 million.

Net cash and cash equivalents usedprovided inby financing activities for the threesix months ended MarchJune 31,30, 2026 was $6.7$1.16 million.billion. During the threesix months ended MarchJune 31,30, 2026, financing activities provided cash from proceeds of the 2031 Notes, partially offset by cash used cashfor the Capped Call Transaction and repurchases of common stock, as well as for tax payments related to shares withheld to satisfy employee tax obligations in connection with the vesting of awards under share-based compensation plans.

In February 2024, ourthe Onto Innovation Board of Directors (the “Board”) approved a share repurchase authorization,authorization (the “2024 Authorization,”) which allows the Companyus to repurchase up to $200 million worth of shares of itsCommon commonStock. stock.Under Repurchasesthe 2024 Authorization, repurchases may be made through both public market and private transactions from time to time. Any amount paid to repurchase the shares in excess of par value, including transaction costs, would be recorded directly as a decrease to additional paid-in capital. During the three and six months ended MarchJune 31,30, 2026, the Company repurchased no shares of the Company’s common stock were repurchased under thisthe repurchase2024 authorization.Authorization. AsDuring the three and six months ended June 28, 2025, no shares, and 492 thousand shares, respectively, of Marchthe 31,Company’s common stock were repurchased under the 2024 Authorization. At June 30, 2026, there was $99.9 million available for future share repurchases under thisthe share2024 repurchase authorization.Authorization.

The Company had a credit agreement with a bank that provides for a variable-rate line of credit which was secured by the marketable securities the Company has with the bank. At January 3, 2026 the Company was permitted to borrow up to 70.0% of the value of eligible securities held at the time the line of credit would be accessed, up to a maximum of $100.0 million. The available line of credit as of January 3, 2026 was $100.0 million with an available interest rate of 4.3%. The Company terminated this line of credit during the threesix months ended MarchJune 31,30, 2026, and did not utilize the line of credit while it was active.