ONTO INNOVATION INC. Segments Disclosure
The Company is organized and operates as one operating and reportable segment; the design, development, manufacture and support of high-performance control metrology, defect inspection, lithography and data analysis systems used by microelectronics device manufacturers. This determination is based on the management approach which designates internal information regularly available to the Chief Operating Decision Maker (“CODM”) for making decisions and assessing performance as the source of determination of the Company’s reportable segments. The Company’s CODM, the Chief
Executive Officer, reviews financial information presented on a consolidated basis for the purpose of making operating decisions and assessing financial performance.
The CODM uses net income as the measure of profit or loss to allocate resources and assess performance. The CODM regularly reviews net income as reported on the Company’s consolidated statements of operations. Financial forecasts and budget to actual results used by the CODM to assess performance and allocate resources, as well as those used for strategic decisions related to headcount and capital expenditures are also reviewed on a consolidated basis. The CODM considers the impact of the significant segment expenses in the table below on net income when deciding whether to reinvest profits, propose share repurchase, or pursue strategic mergers and acquisitions.
The measure of segment assets is reported on the balance sheet as total assets. The CODM does not review segment assets at a level other than that presented in the Company’s consolidated balance sheets.
The table below presents the Company’s consolidated operating results including significant segment expenses:
|
|
Year Ended |
|
|||||||||
|
|
January 3, |
|
|
December 28, |
|
|
December 30, |
|
|||
|
|
(in thousands) |
|
|||||||||
Revenue |
|
$ |
1,005,263 |
|
|
$ |
987,321 |
|
|
$ |
815,868 |
|
Less: |
|
|
|
|
|
|
|
|
|
|||
Adjusted cost of revenue (1) |
|
|
456,578 |
|
|
|
457,855 |
|
|
|
388,429 |
|
Adjusted research and development (2) |
|
|
132,668 |
|
|
|
109,572 |
|
|
|
103,656 |
|
Adjusted sales and marketing (2) |
|
|
69,955 |
|
|
|
75,910 |
|
|
|
61,604 |
|
Adjusted general and administrative (3) |
|
|
90,736 |
|
|
|
76,687 |
|
|
|
66,735 |
|
Other segment items: |
|
|
|
|
|
|
|
|
|
|||
Restructuring and other (4) |
|
|
63,389 |
|
|
|
23,077 |
|
|
|
10,599 |
|
Merger and acquisitions related (4) |
|
|
19,601 |
|
|
|
7,653 |
|
|
|
2,607 |
|
Litigation (4) |
|
|
— |
|
|
|
27 |
|
|
|
11,337 |
|
Amortization |
|
|
39,409 |
|
|
|
49,437 |
|
|
|
54,823 |
|
Operating income |
|
|
132,927 |
|
|
|
187,103 |
|
|
|
116,078 |
|
Interest income, net |
|
|
34,971 |
|
|
|
33,489 |
|
|
|
20,356 |
|
Other expense, net |
|
|
(4,996 |
) |
|
|
(145 |
) |
|
|
(3,852 |
) |
Provision for income taxes |
|
|
26,143 |
|
|
|
18,777 |
|
|
|
11,423 |
|
Net income |
|
$ |
136,759 |
|
|
$ |
201,670 |
|
|
$ |
121,159 |
|
|
|
|
|
|
|
|
|
|
|
|||
(1) Excludes restructuring and other expenses and merger and acquisition related expenses |
|
|||||||||||
(2) Excludes merger and acquisition related expenses |
|
|||||||||||
(3) Excludes litigation expenses and merger and acquisition related expenses |
|
|||||||||||
(4) The Company excludes these expenses in order to provide better comparability between periods as they are not representative of the Company's ongoing operations. |
|
|||||||||||
Depreciation expense is a significant expense related to research and development expenses, sales and marketing expenses and general and administrative expenses as shown above. For the fiscal years ended January 3, 2026, December 28, 2024, and December 30, 2023 depreciation expense was $21.0 million, $12.9 million and $12.4 million, respectively.
The following table lists the different sources of revenue:
|
|
Year Ended |
|
|||||||||||||||||||||
|
|
January 3, |
|
|
December 28, |
|
|
December 30, |
|
|||||||||||||||
|
|
(in thousands, except for percentages) |
|
|||||||||||||||||||||
Systems and software |
|
$ |
847,835 |
|
|
|
84 |
% |
|
$ |
850,443 |
|
|
|
86 |
% |
|
$ |
683,316 |
|
|
|
84 |
% |
Parts |
|
|
84,200 |
|
|
|
8 |
% |
|
|
76,584 |
|
|
|
8 |
% |
|
|
74,604 |
|
|
|
9 |
% |
Services |
|
|
73,228 |
|
|
|
8 |
% |
|
|
60,294 |
|
|
|
6 |
% |
|
|
57,948 |
|
|
|
7 |
% |
Total revenue |
|
$ |
1,005,263 |
|
|
|
100 |
% |
|
$ |
987,321 |
|
|
|
100 |
% |
|
$ |
815,868 |
|
|
|
100 |
% |
The Company’s significant operations outside the United States include sales, service and application offices in Asia and Europe. For geographical revenue reporting, revenue is attributed to the geographic location to which the product is shipped. Revenue by geographic region is as follows:
|
|
Year Ended |
|
|||||||||
|
|
January 3, |
|
|
December 28, |
|
|
December 30, |
|
|||
|
|
(in thousands) |
|
|||||||||
Revenue from third parties: |
|
|
|
|
|
|
|
|
|
|||
Taiwan |
|
$ |
318,770 |
|
|
$ |
307,538 |
|
|
$ |
141,915 |
|
South Korea |
|
|
279,416 |
|
|
|
285,695 |
|
|
|
169,323 |
|
United States |
|
|
121,072 |
|
|
|
104,109 |
|
|
|
130,292 |
|
Japan |
|
|
95,428 |
|
|
|
56,999 |
|
|
|
93,831 |
|
China |
|
|
70,658 |
|
|
|
116,387 |
|
|
|
136,940 |
|
Southeast Asia |
|
|
64,344 |
|
|
|
64,912 |
|
|
|
87,585 |
|
Europe |
|
|
55,575 |
|
|
|
51,681 |
|
|
|
55,982 |
|
Total revenue |
|
$ |
1,005,263 |
|
|
$ |
987,321 |
|
|
$ |
815,868 |
|
|
|
|
|
|
|
|
|
|
|
|||
The following customers represented 10% or more of the Company’s total revenue for the respective years:
|
|
Year Ended |
||||
Customer |
|
January 3, |
|
December 28, |
|
December 30, |
Customer A |
|
20 % |
|
23 % |
|
14 % |
Customer B |
|
15 % |
|
17 % |
|
19 % |
Customer C |
|
14 % |
|
12 % |
|
^ |
|
|
|
|
|
|
|
^ Total customer revenue was less than 10% of total revenue. |
|
|
||||
One customer’s accounts receivable balance was individually greater than 10% of accounts receivable at January 3, 2026, representing approximately 12% of the Company’s total accounts receivable.
Two customers’ accounts receivable balances were individually greater than 10% of accounts receivable at December 28, 2024, representing, in the aggregate approximately 47% of the Company’s total accounts receivable.
Substantially all of the Company’s long-lived assets are located within the United States of America.
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 Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.