ONTO INNOVATION INC. Goodwill & Intangibles Disclosure
Goodwill and purchased intangible assets with indefinite useful lives are not amortized but are reviewed for impairment annually during the fourth quarter of each fiscal year and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The process of evaluating the potential impairment of goodwill and intangible assets requires significant judgment. The Company regularly monitors current business conditions and considers other factors including, but not limited to, adverse industry or economic trends, restructuring actions and lower projections of profitability that may impact future operating results. The Company performed its annual qualitative assessment in the fourth quarter of fiscal 2025 and concluded that no impairment charge was required.
Goodwill
The changes in the carrying amount of goodwill are as follows:
|
|
Year Ended |
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|||||
|
|
January 3, |
|
|
December 28, |
|
||
|
|
(in thousands) |
|
|||||
Balance, beginning of the period |
|
$ |
329,980 |
|
|
$ |
315,811 |
|
Adjustment for previously acquired business |
|
|
57 |
|
|
|
— |
|
Acquired business |
|
|
313,978 |
|
|
|
14,169 |
|
Balance, end of the period |
|
$ |
644,015 |
|
|
$ |
329,980 |
|
The $314.0 million of goodwill acquired in 2025 resulted from the purchase of Semilab USA, See Note 3, “Business Combination,” for further details.
Purchased Intangible Assets
Purchased intangible assets as of January 3, 2026 and December 28, 2024 are as follows:
|
|
Gross Carrying Amount |
|
|
Accumulated Amortization |
|
|
Net |
|
|||
|
|
(in thousands) |
|
|||||||||
January 3, 2026 |
|
|
|
|
|
|
|
|
|
|||
Finite-lived intangible assets: |
|
|
|
|
|
|
|
|
|
|||
Developed technology |
|
$ |
380,698 |
|
|
$ |
217,793 |
|
|
$ |
162,905 |
|
Customer and distributor relationships |
|
|
148,621 |
|
|
|
38,965 |
|
|
|
109,656 |
|
Trademarks and trade names |
|
|
19,171 |
|
|
|
11,634 |
|
|
|
7,537 |
|
Backlog |
|
|
20,000 |
|
|
|
2,000 |
|
|
|
18,000 |
|
Total identifiable intangible assets |
|
$ |
568,490 |
|
|
$ |
270,392 |
|
|
$ |
298,098 |
|
|
|
|
|
|
|
|
|
|
|
|||
December 28, 2024 |
|
|
|
|
|
|
|
|
|
|||
Finite-lived intangible assets: |
|
|
|
|
|
|
|
|
|
|||
Developed technology |
|
$ |
387,716 |
|
|
$ |
298,013 |
|
|
$ |
89,703 |
|
Customer and distributor relationships |
|
|
73,321 |
|
|
|
39,370 |
|
|
|
33,951 |
|
Trademarks and trade names |
|
|
14,171 |
|
|
|
10,368 |
|
|
|
3,803 |
|
Total identifiable intangible assets |
|
$ |
475,208 |
|
|
$ |
347,751 |
|
|
$ |
127,457 |
|
During the fiscal year ended January 3, 2026, the Company disposed of fully amortized identifiable intangible assets whose gross carrying value totaled $117 million. There were no disposals of identifiable intangible assets during the fiscal year ended December 28, 2024. During the fiscal year ended January 3, 2026, the Company acquired $210.0 million of identifiable intangible assets resulted from the purchase of Semilab USA, See Note 3, “Business Combination,” for further details.
Intangible asset amortization expense amounted to $39.4 million, $49.4 million and $54.8 million for the years ended January 3, 2026, December 28, 2024 and December 30, 2023, respectively. Assuming no change in the gross carrying value of identifiable intangible assets and estimated lives, estimated amortization expenses are $77.6 million for 2026, $55.4 million for 2027, $42.5 million for 2028, $35.2 million for 2029, and $35.1 million for 2030.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Feb 24, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 26, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2020 | Feb 19, 2021 | |
| 2019 | Feb 25, 2020 | |
| 2018 | Feb 25, 2019 | |
| 2017 | Feb 26, 2018 | |
| 2016 | Mar 3, 2017 | |
| 2015 | Feb 24, 2016 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.