Good day. Welcome to the Onto Innovation First Quarter Earnings release Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mike Sheaffer, Investor Relations. Please go ahead, sir. Thank you, Danielle, and good afternoon, everyone. Onto Innovation issued its 2023 first quarter financial results this afternoon shortly after the market closed. If you did not receive a copy of the release, please refer to the company's website, where a copy of the release is posted. Joining us on the call today are Michael Plisinski, Chief Executive Officer; and Mark Slicer, 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, risks, and uncertainties that can cause actual results to vary materially. For more information regarding the risks that may affect Onto Innovation's results, I would encourage you to review our earnings release and our SEC filings. Onto Innovation does not undertake the obligation to update those forward-looking statements in light of new information or future events. As a reminder, today's discussion of our financial results will be presented on a non-GAAP financial basis unless otherwise specified. A detailed reconciliation between GAAP and non-GAAP results can be found in today's earnings release. I'll now go ahead and turn the call over to our CEO, Mike Plisinski. Mike? Thank you, Mike. Good afternoon, everyone, and thank you for joining our call today. Onto Innovation closed the first quarter with revenue of $199 million, near the midpoint of guidance, while earnings came in near the high end of guidance, aided by gross margin favorably impacted by product mix. The primary shift in mix was an increase in revenue from higher-margin Iris film systems and two lithography tools sliding into the second quarter due to delays from our supply chain. Following the growth of the last few years, we're increasing our focus on strategic supply chain initiatives and expanding our development engagements. We expect our investment in the supply chain to yield over $10 million in cost synergies in 2024, with additional savings to follow. Expansion of our development engagements allows us to participate earlier in our customers' process development. This provides us more time and insight to deliver the comprehensive solutions required for R&D and ultimately migrated into volume production. In the quarter, we were honored to have been awarded by world leader TSMC with the Novel Technology Collaboration Award for our contributions last year to advance both front and back-end process control. With over 60% of our first quarter revenue tied to new R&D or pilot line investments, we believe we're setting a strong foundation for future growth across several exciting markets. Let's start with the highlights from our advanced nodes customers. Advanced logic revenue was essentially flat from the fourth quarter and represented 53% of our advanced nodes revenue. Over 85% of our advanced logic system revenue was for applications below 5 nanometer. Our latest AI-Diffract software incorporates an exclusive modeling technique to enable earlier adoption of OCD in R&D lines. We now accurately compensate for the broader process shifts associated with R&D without frequent and time-consuming model retraining. This allows our customers to leverage the speed of Atlas 3D metrology earlier in process development, including sub-2 nanometer structures years ahead of volume production. Not surprisingly, revenue from memory customers declined roughly 50% from the fourth quarter, in line with several publicly announced capacity reductions and expansion delays. In the quarter, our Iris films metrology was successfully qualified by a second top 3 semiconductor manufacturer. These systems are now part of a volume purchase agreement that we believe implies a jump from 0 to over 25% share of films metrology at this customer. The agreement also implies integrated metrology share of over 70%, and of course includes our flagship Atlas OCD platform and our Echo and Element metrology systems for opaque films and materials applications. The VPA covers shipments in 2023 and is valued at over $90 million, adding some confidence to our current estimates for the year. This account demonstrates the importance of our strategy to our customers. By working together earlier in their development, we're able to provide a portfolio of technologies that deliver better dimensional and material metrology at speeds required by high volume production. Similar to our advanced nodes customers, we see an increase in R&D engagements for inspection of new chiplet packaging designs. These designs require inspection resolution at submicron levels in systems that must also provide a wide range of metrology for denser, 3D interconnects and through-silicon vias needed for chip stacking. In the quarter, Dragonfly inspection was selected by a top five semiconductor manufacturer implementing new 2.5D packaging technology. A second top five manufacturer selected Dragonfly inspection in EB 40 for system-on-integrated-chips, or SoIC for 3D chip stacking applications. Revenue from power devices in the first quarter was up 20% over the prior year, and our portfolio of inspection technology in dimensional and films metrology convinced 18 customers in the quarter to purchase a new Onto Innovation product for their process, and several added combinations of three or more products. Several of these systems went to support the high-growth gallium nitride and silicon carbide segments of the power market. In closing, we're happy to announce our second demo center opened in January in Taiwan to facilitate customers' access to our most advanced equipment. Over 10 packaging and specialty customers have already hand-carried their next-generation wafers to our facility to work with our experts and latest technology. With our new training systems in place, our training capacity has more than doubled, and the course offerings have expanded significantly. This will allow us to cross-train over 60% of our field service engineers on our most advanced equipment, paving the way to more efficiently serve future growth. Our improved support infrastructure and productivity is leading to a pickup in annual and multiyear service contracts. In the first quarter, we had 5 new customers moving to recurring support contracts. Renewal rates for existing recurring contracts exceeds 95%. With that, I'll turn the call over to Mark to review our financial highlights. Thanks, Mike. Good afternoon, everyone. As Mike highlighted, we closed the first quarter with revenue of $199 million, down 17% year-over-year and just below the midpoint of our first-quarter guidance range, while achieving an EPS of $0.92, which is $0.04 above the midpoint of our EPS guidance range of $0.80-$0.95. The impact of the memory market being the biggest driver of this revenue decline after coming off our record-setting fourth quarter and year. Moving on to the quarterly revenue by market. Advanced nodes revenue of $66 million declined 35% year-over-year and represents 33% of revenue. Specialty device and advanced packaging achieved $93 million in revenue, declined 6% year-over-year and represents 47% of revenue. Software and services revenue of $40.2 million was down 4% year-over-year and represents 20% of revenue. As Mike stated, we achieved 54% gross margin for the first quarter, exceeding our guidance range of 51%-53%, primarily from the shift of the two JetStep systems into the second quarter due to delays from our supply chain. First quarter operating expenses were $58 million, down $3 million quarter-over-quarter, and $3 million above the high end of our guidance range. We exceeded the guidance range as we maintained a higher level investment in R&D to drive our strategic growth priorities, as well as several cost reduction initiatives didn't see the immediate drop through expected in Q1. However, we are still committed to delivering $25 million-$30 million of cost reductions for the year. Our operating income of $49 million was 25% of revenue for the first quarter, compared to 31% from the prior year. Our net income for the first quarter was $45 million, or $0.92 per share, down 30% over the same period last year. As previously mentioned, $0.04 above the midpoint of our guidance range. Moving on to the balance sheet. We ended the first quarter with cash and short-term investments of $584 million, up $36 million from the start of the year, with operating cash flow of $50 million, representing 25% of revenue. Inventory ended the quarter at $338 million, an increase of $14 million since year-end, primarily driven by the delay in the shipments of the two JetStep systems, as well as the continued receipt of parts to service our expanded install base. As stated during our prior earnings call, a top priority for 2023 is to optimize our levels of inventory to return to mid $200 million range by the end of 2023. Inflows of raw materials are declining as we have worked with suppliers to continue to burn off our existing inventory. This will contribute to our free cash flow returning to historical and consistent performance levels of over 20%. Accounts receivable decreased $32 million to $210 million in the quarter, and our day sales outstanding increased 9 days to 96 days. During the quarter, we repurchased an additional 46,000 shares of common stock, bringing our cumulative share repurchase to just over 1 million shares under the current program, or $68 million return of capital to shareholders. We have $32 million remaining under our existing $100 million authorization. Now turning to our outlook for Q2. We currently expect revenue for the second quarter to be $203 million, plus or minus four percentage points. We expect gross margins will be between 50%-52%, down versus Q1 due to the forecasted mix in the second quarter, including a projected record six JetStep systems. For operating expenses, we expect to be between $58 million-$60 million. For the full year 2023, we expect our effective tax rate to be between 14%-16%. We expect our diluted share count for Q2 to be approximately 49.2 million shares. Based on these assumptions, we anticipate our non-GAAP earnings to be between $0.75 per share and $0.90 per share. Looking ahead to the third quarter, we expect to be back to 54% gross margin levels due to the improving contribution from our JetStep systems. We expect OpEx to be in the range of $55 million-$56 million as we move past the annual one-time compensation elements in Q2 and see the full benefit of our cost reduction activities. Together, this will result in exceeding first quarter earning levels. As I referenced in my earlier comments and highlighted during our February earnings call, we are reducing costs in the range of $25 million-$30 million, which includes driving further operational and supply chain efficiencies at our manufacturing sites, staff reductions, and reduced discretionary costs. With these cost reductions predominantly permanent in nature, we expect to move back into our gross margin and operating profit metrics of the long-term operating model when industry growth returns. With that, I will turn it back over to Mike for additional insights into Q2 and the remainder of 2023. Mike? Thank you, Mark. As Mark just mentioned, we expect only a slight uptick from the first quarter, reflecting the continued weakness in memory and weaker advanced logic spending projected in the second quarter. Offsetting that weakness is strong demand from specialty customers in power, packaging, and EUV wafer manufacturing. Collectively, we believe our specialty and advanced packaging markets reached the bottom in the first quarter, with solid growth into the second quarter and incrementally stronger second half. Although we believe advanced nodes will bottom in the second quarter, the rate of recovery remains uncertain. Even while revenue projections reflect broader market challenges, we're very pleased with the progress we're making expanding into new accounts and new markets. We continue to grow our position in the planar films market. We're growing our layer share for leading-edge logic, and each quarter, we see new submicron applications moving to our Dragonfly G3 platform, including power applications in GaN and silicon carbide. We expect these wins to position us well for outsized revenue growth when markets recover and our customers once again focus on ramping production to meet the growing demand for complex semiconductors. With that demand, combined with the initiatives to strengthen our financial model, we expect to more efficiently serve this projected growth, which should be reflected in higher margins and greater shareholder returns. I'll now turn the call over to Danielle for your questions. Thank you. If you'd like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, that's press star one to ask a question. We'll pause for a moment to allow everyone an opportunity to signal. We'll take our first question from the line of Quinn Bolton with Needham & Company. Please go ahead. Your line is now open. Hey, guys. Thanks for letting me ask a question. Mike, I guess, you know, kind of going through the puts and takes in the business, understand the weak memory environment and, you know, some pressure on the advanced foundry logic in the second quarter that you mentioned. You talked about a $90 million contract, talked about strength and specialty. I think the China and mature nodes businesses seem to be second-half weighted for the industry in whole. I guess I'm wondering, do you guys see a stronger second half relative to the first half? Relative to the first half, yes. You know, I wouldn't say we're expecting a massive snapback in the second half. Okay. modest half-over-half growth, consistent with your expectations. Yeah. And, as I mentioned, the advanced logic, the advanced nodes continue to be the most, let's say, where the recovery is the furthest out. But we do see at least our specialty in advanced packaging markets growing fairly nicely in the second quarter and maintaining that rate of growth or at least a strong growth right through the second half. That's really gonna carry the strength of the growth we see in the second half. Got it. Thank you for that. I guess, you know, question, you know, looks like you guys continue to see strength or share gains in the planar films segment with the Iris tool. I think last year you said you generated about $50 million of revenue. As you look to 2023, you know, how do you see Iris and, you know, what's the outlook there? Do you think you can continue to make, you know, share gains in 2023 with that solution? Yeah, we definitely do. I mean, that was, that was the exciting part of the highlight I made for the first quarter, having Iris qualified by another top 3 semiconductor manufacturer. You know, we had one before, and we had several other smaller customers. Now we have another one, and we have, as we mentioned in the fourth quarter, evaluations at nearly all of the top five semiconductor manufacturers now. Momentum's building. The value proposition is being proven, and I think that momentum will carry forward this year in revenue growth of, you know, certainly double digits, fairly strong double digits. Once the industry really recovers and we see broad-based expansions, those tool or record positions we win are gonna have much longer or, you know, bigger tails, a broader impact on our revenue. Got it. Just a quick one for Mark. As you look to the third quarter, you mentioned gross margin, you know, coming back to the range of roughly 54%. Should we assume that you're back to sort of a more normalized run rate of four litho JetStep X500 systems, in the third quarter? Yeah. Yeah. Quinn, that's a good assumption. Yep. I would say that that's consistent with what we're seeing. Also just to add to that, we did say in the past that we were, you know, working through the cost reduction, the margin improvements in litho throughout this year with the fourth quarter, being, you know, sort of reaching our target model. We'll see the benefit of that as well as we move into the second half, not just, a realized number, but also better margins on those tools. Excellent. Thank you. We'll take our next question from the line of Craig Ellis with B. Riley Securities. Please go ahead. Your line is now open. Thanks for taking the questions. I'll start with one for you, Mike, and just make it high level. In the past, you've often characterized your expected performance versus industry as either in line or outgrowing and often outgrowing. As you look at this year and acknowledging we've got some pretty significant crosscurrents, where do you think the business shakes out versus industry growth? Where's the industry growth end up? I've seen, you know, a lot of different numbers right now on where industry growth shakes out. I think we're comfortable with the guidance we've provided. We don't see any deterioration to that. We're working hard to actually drive some upside to that previous guidance. You see the emphasis we have on the power semiconductors, some of the 2.5D and 3D packaging technologies we're engaged in, which are coming online. The IC substrate or the panel packaging business with the litho and then bringing in process control or introducing process control into those markets as well. Where the spend is, we have more to offer those customers. You know, from our perspective, our thesis for why we were going to outperform remains. The, you know, we've talked about the films also adding some upside growth. You know, if you look for us, you know, wherever you look at the market, we've said, you know, down 20%, and we're expecting or at least we're fighting to be above that. Got it. That's real helpful. Mark, I wanted to dig in deeper on where we stand with $25 million-$30 million in cost savings. How much of the $25 million-$30 million is comprehended in the color that you provided for operating expense to be back at $55 million in the third quarter? What does that leave for the fourth quarter? Because it doesn't seem like we really captured anything in the first quarter, so I want to understand how we're progressing and when we realize the full benefit of that. Yeah. No, I mean, we did capture some. I mean, when you look at our run rate coming off of Q4, we were, you know, in the low $60 million, you know, $61 range of OpEx. We did have some reductions, certainly not where we wanted to be for Q1. I think just coming off the strong year-end and pivoting into the drop, I mean, we're certainly trying to capture that. We will see, you know, some of it in Q2. Again, we have the spike in annual kind of compensation elements that historically have always hit in Q2. I think we'll see the bigger benefit in Q3 and Q4. You know, that's why we're confident that we're back into that, you know, 55 range of operating expense, which, you know, is certainly lower than as you'd expect to our, you know, 2022 run rates where we were, you know, topping out at, you know, we're at the 60-62 range. Are you saying that you think we've gotten perhaps a third of it now through the second quarter, but with some of the second quarter's really not visible because of the annual expense increases that you have? Yeah. we'll get the remaining two thirds in 3 and 4 Q? Correct. Yeah. That would be You said some of it would be structural. How much of the savings that we're seeing is structural and how much of it is just more temporal? Thanks, Mark. Yeah. I mean, I'd say majority of it is as, is permanent. I mean, that's what we're striving for, obviously, as we want to see when the growth comes back, so we want to be able to drive that leverage. I mean, there obviously is some variable spend as you'd expect items like sales commissions and things like that to come down. Again, we're, you know, aiming to make those, you know, structural changes long term. You know, I wouldn't consider this cutting variable spend, that's gonna, you know, come back up the second, you know, we see that growth. It's gonna be managed to the point where we're gonna get back into the model of an expense profile that has that contribution, that drop through that we wanna get, you know, as far as the model dictates. To answer your question, predominantly, as I said, you know, taking those out and then keeping those costs out and managing the other variable spend to the degree we can. Got it. Thanks, guys. Thanks, Craig. Once again, if you'd like to ask a question, please press star one. We'll take our next question from the line of Vedvati Shrotri with Jefferies. Please go ahead. Your line is now open. Hi. Thanks for taking my question. I think in the last quarter you had quantified about, you know, $70 million coming from three opportunities. You know, the bigger piece of it was JetStep, you know, in 2023, and the next two pieces were NovusEdge and the panel portion of it. Has this $70 million changed? Could you just give some puts and takes? Like, do you expect to see more from JetStep or NovusEdge or the panel piece of it? I think power, not panel. JetStep is part of the panel piece, so that is pretty well established. Sorry. You know, we're-. I'm sorry. I meant the thin piece of it then. Yep. Yeah. The planar films. Yeah. Yes. Planar films, we definitely as we sort of alluded to, we see some growth there, some upside there. We expect to, you know, exceed or meet or exceed our targets there. Power, we're definitely gonna exceed our targets there based on what we're seeing also, you know, from the adoption we talked about in the call on the first quarter. 18 new customers selecting one of our products in the portfolio and, you know, our intent and expectation is we can sell them additional products in the portfolio as they realize the benefits of a suite of products tied together by our Discover Enterprise software platform. That momentum is I think building nicely. The other piece you mentioned was the NovusEdge. There we're also constrained by manufacturing, which we're trying to, speed up or, you know, release that constraint. That is at least going to maintain the guidance I provided, I think roughly $70 million-$80 million, if not exceed. If we can release some more product, customers will take it. Got it. That's helpful. Thank you. Once again, if you'd like to ask a question, press star one. There are no further questions at this time. Mike Sheaffer, I'll turn the call back to you for any additional closing remarks. Thanks, Danielle. Just a quick reminder for everybody about 3 upcoming events. First, Onto Management will be participating at the B. Riley Conference in L.A. on May 24th. Second, we will be hosting our analyst event at the New York Stock Exchange on June 1st. Third, we're participating at the Stifel Conference in Boston on June 6th. Thanks again everybody for joining us today. A replay of the call is going to be available on our website about 7:30 P.M. Eastern Time this evening. We'd like to thank you for your continued interest in Onto Innovation. Danielle, please conclude the call. This concludes today's call. Thank you for your participation. You may now disconnect.