Investing in Onto Innovation (ONTO)? Don't Miss Assessing Its International Revenue Trends

Have you assessed how the international operations of Onto Innovation (ONTO) performed in the quarter ended September 2025? For this maker of semiconductor manufacturing equipment, possessing an expansive global footprint, parsing the trends of international revenues could be critical to gauge its financial resilience and growth prospects.

In today's increasingly interconnected global economy, a company's ability to tap into international markets can be a pivotal factor in shaping its overall financial health and growth trajectory. For investors, understanding a company's reliance on overseas markets has become increasingly crucial, as it offers insights into the company's sustainability of earnings, ability to tap into diverse economic cycles and overall growth potential.

International market involvement serves as insurance against economic downturns at home and enables engagement with economies that are growing more quickly. Still, this move toward diversification is not without its challenges, as it involves navigating through the fluctuations of currencies, geopolitical threats, and the distinctive nature of various markets.

While delving into ONTO's performance for the past quarter, we observed some fascinating trends in the revenue from its foreign segments that are commonly modeled and observed by analysts on Wall Street.

For the quarter, the company's total revenue amounted to $218.19 million, experiencing a decline of 13.5% year over year. Next, we'll explore the breakdown of ONTO's international revenue to understand the importance of its overseas business operations.

A Closer Look at ONTO's Revenue Streams Abroad

Southeast Asia accounted for 10.2% of the company's total revenue during the quarter, translating to $22.33 million. Revenues from this region represented a surprise of +126.69%, with Wall Street analysts collectively expecting $9.85 million. When compared to the preceding quarter and the same quarter in the previous year, Southeast Asia contributed $13.82 million (5.5%) and $15.59 million (6.2%) to the total revenue, respectively.

During the quarter, Taiwan contributed $59.24 million in revenue, making up 27.2% of the total revenue. When compared to the consensus estimate of $72.28 million, this meant a surprise of -18.04%. Looking back, Taiwan contributed $65.62 million, or 25.9%, in the previous quarter, and $78.27 million, or 31%, in the same quarter of the previous year.

Of the total revenue, $16.02 million came from Japan during the last fiscal quarter, accounting for 7.3%. This represented a surprise of +13.5% as analysts had expected the region to contribute $14.11 million to the total revenue. In comparison, the region contributed $33.77 million, or 13.3%, and $12.56 million, or 5%, to total revenue in the previous and year-ago quarters, respectively.

Europe generated $10.59 million in revenues for the company in the last quarter, constituting 4.9% of the total. This represented a surprise of -13.48% compared to the $12.24 million projected by Wall Street analysts. Comparatively, in the previous quarter, Europe accounted for $12.85 million (5.1%), and in the year-ago quarter, it contributed $14.68 million (5.8%) to the total revenue.

During the quarter, South Korea contributed $44.86 million in revenue, making up 20.6% of the total revenue. When compared to the consensus estimate of $65.35 million, this meant a surprise of -31.35%. Looking back, South Korea contributed $82.65 million, or 32.6%, in the previous quarter, and $77.01 million, or 30.5%, in the same quarter of the previous year.

Revenue Forecasts for the International Markets

It is projected by analysts on Wall Street that Onto Innovation will post revenues of $257.93 million for the ongoing fiscal quarter, a decline of 2.3% from the year-ago quarter. The expected contributions from Southeast Asia, Taiwan, Japan, Europe and South Korea to this revenue are 4.1%, 33.3%, 6.8%, 5.5%, and 29.5%, translating into $10.47 million, $85.9 million, $17.46 million, $14.19 million, and $76.1 million, respectively.

For the entire year, the company's total revenue is forecasted to be $995.46 million, which is an improvement of 0.8% from the previous year. The revenue contributions from different regions are expected as follows: Southeast Asia will contribute 4.2% ($42.18 million), Taiwan 32.8% ($326.37 million)Japan 7.4% ($73.71 million)Europe 5.6% ($55.82 million) and South Korea 31.9% ($317.41 million) to the total revenue.

The Bottom Line

Onto Innovation's reliance on international markets for revenues offers both opportunities and risks. Hence, keeping an eye on its international revenue trends could significantly help forecast the company's prospects.

In an era of growing international ties and escalating geopolitical disputes, financial analysts on Wall Street pay keen attention to these developments to fine-tune their earnings estimations for businesses operating across borders. It's important to note, however, that a range of additional variables, like a company's local market status, also play a crucial role in shaping these forecasts.

At Zacks, a company's changing earnings outlook is given considerable attention due to its proven, strong influence on a stock's price performance in the near term. The connection here is straightforward and positive: when earnings estimates are revised upward, the stock price generally follows suit, increasing as well.

The Zacks Rank, our proprietary stock rating mechanism, demonstrates a notable performance history confirmed through external audits. It effectively utilizes the power of earnings estimate revisions to act as a predictor of a stock's price performance in the near term.

Currently, Onto Innovation holds a Zacks Rank #3 (Hold), signifying its potential to match the overall market's performance in the forthcoming period. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .

A Look at Onto Innovation's Recent Stock Price Performance

Over the past month, the stock has lost 4.5% versus the Zacks S&P 500 composite's 1.5% increase. The Zacks Computer and Technology sector, of which Onto Innovation is a part, has risen 1.6% over the same period. The company's shares have increased 17.9% over the past three months compared to the S&P 500's 4.5% increase. Over the same period, the sector has risen 8.4%

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This article originally published on Zacks Investment Research (zacks.com).

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