onsemi Reports First Quarter 2026 Results
Rhea-AI Summary
onsemi (Nasdaq: ON) reported Q1 2026 revenue of $1,513.3 million, GAAP gross margin of 38.5%, GAAP operating margin of (3.5)% and non-GAAP operating margin of 19.1%. GAAP diluted loss per share was $(0.08); non-GAAP diluted EPS was $0.64. The company repurchased $346 million of stock (~160% of free cash flow) and said AI data center revenue more than doubled year-over-year.
Positive
- Operating income +10% year-over-year
- AI data center revenue doubled year-over-year
- Share repurchases of $346M (~160% of free cash flow)
- Non-GAAP operating margin of 19.1%
Negative
- GAAP operating margin of (3.5)%
- GAAP diluted loss per share of $(0.08)
- Revenue down 1% sequentially (Q1 2026 vs Q4 2025)
Market Reaction – ON
Following this news, ON has declined 4.30%, reflecting a moderate negative market reaction. Argus tracked a peak move of +10.0% during the session. Our momentum scanner has triggered 9 alerts so far, indicating moderate trading interest and price volatility. The stock is currently trading at $97.65. This price movement has removed approximately $1.80B from the company's valuation. Trading volume is above average at 1.6x the average, suggesting increased trading activity.
Data tracked by StockTitan Argus (15 min delayed). Upgrade to Gold for real-time data.
Key Figures
Market Reality Check
Peers on Argus
ON showed a pre-news move classified as down in the momentum scanner, while only one tracked peer (GFS) appeared with a modest up move and no same-direction peers, pointing to stock-specific dynamics rather than a broad sector move.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Feb 09 | Q4 2025 earnings | Positive | +3.5% | Q4 2025 beat with strong free cash flow and new $6B buyback. |
| Nov 03 | Q3 2025 earnings | Positive | +0.8% | Q3 2025 solid margins and cash generation with continued buybacks. |
| Aug 04 | Q2 2025 earnings | Negative | -15.6% | Q2 2025 revenue declines across segments despite positive cash flow. |
| May 05 | Q1 2025 earnings | Negative | -8.3% | Q1 2025 significant revenue drop and severe GAAP margin pressure. |
| Feb 10 | Q4 2024 earnings | Negative | -8.2% | Q4 2024 revenue declines across segments despite strong free cash flow. |
Earnings events have often led to negative moves, with an average same-tag reaction of -5.58%, though the two most recent earnings releases showed modest positive follow-through.
Over the last five earnings cycles, onsemi’s results have featured fluctuating revenue and margins alongside strong free cash flow and aggressive buybacks. Earlier in 2025, significant revenue declines and margin pressure led to sharp negative reactions, while later 2025 and early 2026 earnings with steadier margins, solid cash generation, and a large share repurchase authorization saw mild gains. Today’s Q1 2026 report, showing revenue above guidance midpoint and solid non-GAAP profitability, fits the recent recovery narrative following prior trough conditions.
Historical Comparison
In the past year, onsemi’s 5 earnings releases saw an average move of -5.58%, with sharp selloffs after weaker quarters and only modest gains after stronger prints.
Earnings results show a transition from steep revenue and margin declines in early 2025 toward stabilizing trends, improving non-GAAP profitability, and consistent free cash flow and buybacks into late 2025 and early 2026.
Market Pulse Summary
This announcement highlights Q1 2026 revenue of $1,513.3M above the guidance midpoint, GAAP gross margin of 38.5%, and non-GAAP EPS of $0.64, alongside robust share repurchases of $346M. AI data center revenue more than doubled year over year and Q2 2026 guidance calls for $1,535–$1,635M in revenue. Historically, earnings have produced volatile moves, so investors may focus on execution versus this outlook and the balance between GAAP losses and non-GAAP profitability.
Key Terms
non-gaap financial
convertible notes financial
warrants financial
10b5-1 financial
restricted stock units financial
performance stock units financial
AI-generated analysis. Not financial advice.
Year-over-year operating income growth outpaces revenue growth by 2x
SCOTTSDALE, Ariz., May 04, 2026 (GLOBE NEWSWIRE) -- onsemi (the “Company”) (Nasdaq: ON) today announced its first quarter 2026 results with the following highlights:
- Revenue of
$1,513 million , exceeding the midpoint of our guidance - GAAP and non-GAAP gross margin of
38.5% - GAAP operating margin of (3.5)% and non-GAAP operating margin
19.1% - GAAP diluted loss per share of (
$0.08) and non-GAAP diluted earnings per share$0.64 - Share repurchases of
$346 million , representing approximately160% of free cash flow
“We exceeded expectations as demand strengthened through the quarter and we have moved beyond the cyclical trough on a path to recovery. Our AI data center business accelerated, growing more than
“With our operational improvements, we delivered strong operating leverage in our business with a
Business Highlights:
- AI data center revenue more than doubled year-over-year due to broader adoption across the power tree with multiple chip vendors and leading hyperscalers.
- Leading in the transition to 900V EV architectures with onsemi EliteSiC, enabling extended range and flash charging, including expanded collaborations with Geely and NIO.
- Increasing software-defined vehicle momentum with initial production shipments of Treo-based 10BASE-T1S Ethernet solutions, supporting the next-generation zonal architecture at a leading North American OEM.
- Announced new design win with Sineng Electric to power its 430kW liquid-cooled energy storage systems and 320 kW solar inverter.
Selected financial results for the quarter are shown below with comparable periods (unaudited):
| GAAP | Non-GAAP | ||||||||||||||||||
| (Revenue and Net Income in millions) | Q1 2026 | Q4 2025 | Q1 2025 | Q1 2026 | Q4 2025 | Q1 2025 | |||||||||||||
| Revenue | $ | 1,513.3 | $ | 1,530.1 | $ | 1,445.7 | $ | 1,513.3 | $ | 1,530.1 | $ | 1,445.7 | |||||||
| Gross Margin | 38.5 | % | 36.0 | % | 20.3 | % | 38.5 | % | 38.2 | % | 40.0 | % | |||||||
| Operating Margin | (3.5 | )% | 13.1 | % | (39.7 | )% | 19.1 | % | 19.8 | % | 18.3 | % | |||||||
| Net Income (loss) attributable to ON Semiconductor Corporation | $ | (33.4 | ) | $ | 181.8 | $ | (486.1 | ) | $ | 253.1 | $ | 257.2 | $ | 231.6 | |||||
| Diluted Earnings (loss) Per Share | $ | (0.08 | ) | $ | 0.45 | $ | (1.15 | ) | $ | 0.64 | $ | 0.64 | $ | 0.55 | |||||
Revenue Summary
(in millions)
(Unaudited)
| Quarters Ended | |||||||||||
| Business Segment | Q1 2026 | Q4 2025 | Q1 2025 | Sequential Change | Year-over- Year Change | ||||||
| PSG | $ | 736.6 | $ | 724.2 | $ | 645.1 | 2 | % | 14 | % | |
| AMG | 540.4 | 556.3 | 566.4 | (3 | )% | (5 | )% | ||||
| ISG | 236.3 | 249.6 | 234.2 | (5 | )% | 1 | % | ||||
| Total | $ | 1,513.3 | $ | 1,530.1 | $ | 1,445.7 | (1 | )% | 5 | % | |
SECOND QUARTER 2026 OUTLOOK
The following table outlines onsemi’s projected second quarter of 2026 GAAP and non-GAAP outlook.
| Total onsemi GAAP | Special Items ** | Total onsemi Non-GAAP*** | |||
| Revenue | - | ||||
| Gross Margin | |||||
| Operating Expenses | |||||
| Other Income and Expense (including interest), net | ( | - | ( | ||
| Diluted Earnings Per Share | |||||
| Diluted Shares Outstanding * | 401 million | 7 million | 394 million | ||
| * | Diluted shares outstanding can vary as a result of, among other things, the vesting of restricted stock units, the incremental dilutive shares from the convertible notes, and the repurchase or the issuance of stock or convertible notes or the sale of treasury shares. In periods when the quarterly average stock price per share exceeds |
| ** | Special items may include: amortization of acquisition-related intangibles; expensing of appraised inventory fair market value step-up; restructuring-related cost of revenue charges; non-recurring facility costs; in-process research and development expenses; restructuring, asset impairments and other, net; goodwill impairment charges; gains and losses on debt prepayment; actuarial (gains) losses on pension plans and other pension benefits; and certain other special items, as necessary. These special items are out of our control and could change significantly from period to period. As a result, we are not able to reasonably estimate and separately present the individual impact or probable significance of these special items, and we are similarly unable to provide a reconciliation of the non-GAAP measures. The reconciliation that is unavailable would include a forward-looking income statement, balance sheet and statement of cash flows in accordance with GAAP. For this reason, we use a projected range of the aggregate amount of special items in order to calculate our projected non-GAAP operating expense outlook. |
| *** | We believe these non-GAAP measures provide important supplemental information to investors. We use these measures, together with GAAP measures, for internal managerial purposes and as a means to evaluate period-to-period comparisons. However, we do not, and you should not, rely on non-GAAP financial measures alone as measures of our performance. We believe that non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when taken together with GAAP results and the reconciliations to corresponding GAAP financial measures that we also provide in our releases, provide a more complete understanding of factors and trends affecting our business. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures, even if they have similar names. |
TELECONFERENCE
onsemi will host a conference call for the financial community at 5 p.m. Eastern Time (ET) on May 4, 2026 to discuss this announcement and onsemi’s first quarter 2026 results. The Company will also provide a real-time audio webcast of the teleconference on the Investor Relations page of its website at http://www.onsemi.com. The webcast replay will be available at this site approximately one hour following the live broadcast and will continue to be available for approximately 30 days following the conference call. Investors and interested parties can also access the conference call by pre-registering here.
About onsemi
onsemi (Nasdaq: ON) delivers intelligent power and sensing technologies that enable electrification, energy efficiency, safety, and automation across automotive, industrial, and AI data center end-markets. With a highly differentiated and innovative product portfolio, onsemi helps customers solve complex challenges to achieve higher efficiency, improved performance, and lower system cost, while supporting a safer, cleaner, and more energy-efficient world. onsemi is included in the S&P 500® index. Learn more about onsemi at www.onsemi.com.
onsemi and the onsemi logo are trademarks of Semiconductor Components Industries, LLC. All other brand and product names appearing in this document are registered trademarks or trademarks of their respective holders. Although the Company references its website in this news release, information on the website is not to be incorporated herein.
| Krystal Heaton | Parag Agarwal | |
| Director, Head of Public Relations | Vice President - Investor Relations & Corporate Development | |
| onsemi | onsemi | |
| (480) 242-6943 | (602) 244-3437 | |
| Krystal.Heaton@onsemi.com | investor@onsemi.com |
This document includes “forward-looking statements,” as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included or incorporated in this document could be deemed forward-looking statements, particularly statements about the future financial performance of onsemi, including financial guidance for the second quarter of 2026. Forward-looking statements are often characterized by the use of words such as “believes,” “estimates,” “expects,” “projects,” “may,” “will,” “intends,” “plans,” “anticipates,” “should” or similar expressions or by discussions of strategy, plans or intentions. All forward-looking statements in this document are made based on our current expectations, forecasts, estimates and assumptions and involve risks, uncertainties and other factors that could cause results or events to differ materially from those expressed in the forward-looking statements. Certain factors that could affect our future results or events are described under Part I, Item 1A “Risk Factors” in the 2025 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 9, 2026 (the “2025 Form 10-K”) and from time to time in our other SEC reports. Readers are cautioned not to place undue reliance on forward-looking statements. We assume no obligation to update such information, which speaks only as of the date made, except as may be required by law. Investing in our securities involves a high degree of risk and uncertainty, and you should carefully consider the trends, risks and uncertainties described in this document, our 2025 Form 10-K and other reports filed with or furnished to the SEC before making any investment decision with respect to our securities. If any of these trends, risks or uncertainties actually occurs or continues, our business, financial condition or operating results could be materially adversely affected, the trading prices of our securities could decline, and you could lose all or part of your investment. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this cautionary statement.
ON SEMICONDUCTOR CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share and percentage data)
| Quarters Ended | |||||||||||
| April 3, 2026 | December 31, 2025 | April 4, 2025 | |||||||||
| Revenue | $ | 1,513.3 | $ | 1,530.1 | $ | 1,445.7 | |||||
| Cost of revenue | 930.2 | 979.1 | 1,151.9 | ||||||||
| Gross profit | 583.1 | 551.0 | 293.8 | ||||||||
| Gross margin | 38.5 | % | 36.0 | % | 20.3 | % | |||||
| Operating expenses: | |||||||||||
| Research and development | 144.3 | 133.8 | 164.1 | ||||||||
| Selling and marketing | 63.0 | 61.5 | 68.3 | ||||||||
| General and administrative | 89.4 | 86.0 | 84.4 | ||||||||
| Amortization of intangible assets | 10.5 | 10.8 | 11.4 | ||||||||
| Restructuring, asset impairments and other, net | 329.3 | 58.8 | 539.3 | ||||||||
| Total operating expenses | 636.5 | 350.9 | 867.5 | ||||||||
| Operating income (loss) | (53.4 | ) | 200.1 | (573.7 | ) | ||||||
| Other income (expense), net: | |||||||||||
| Interest expense | (12.7 | ) | (17.3 | ) | (18.0 | ) | |||||
| Interest income | 17.7 | 20.6 | 26.6 | ||||||||
| Other income | 3.8 | 13.7 | 4.1 | ||||||||
| Other income (expense), net | 8.8 | 17.0 | 12.7 | ||||||||
| Income (loss) before income taxes | (44.6 | ) | 217.1 | (561.0 | ) | ||||||
| Income tax (provision) benefit | 11.7 | (35.3 | ) | 75.8 | |||||||
| Net income (loss) | (32.9 | ) | 181.8 | (485.2 | ) | ||||||
| Less: Net income attributable to non-controlling interest | (0.5 | ) | — | (0.9 | ) | ||||||
| Net income (loss) attributable to ON Semiconductor Corporation | $ | (33.4 | ) | $ | 181.8 | $ | (486.1 | ) | |||
| Net income (loss) per share of common stock attributable to ON Semiconductor Corporation: | |||||||||||
| Basic | $ | (0.08 | ) | $ | 0.45 | $ | (1.15 | ) | |||
| Diluted | $ | (0.08 | ) | $ | 0.45 | $ | (1.15 | ) | |||
| Weighted average common shares outstanding: | |||||||||||
| Basic | 394.1 | 400.8 | 421.3 | ||||||||
| Diluted | 394.1 | 402.3 | 421.3 | ||||||||
ON SEMICONDUCTOR CORPORATION
UNAUDITED CONSOLIDATED BALANCE SHEETS
(in millions)
| April 3, 2026 | December 31, 2025 | April 4, 2025 | |||||||||
| Assets | |||||||||||
| Cash and cash equivalents | $ | 2,003.6 | $ | 2,147.6 | $ | 2,762.5 | |||||
| Short-term investments | 400.0 | 400.0 | 250.0 | ||||||||
| Receivables, net | 862.8 | 908.0 | 825.0 | ||||||||
| Inventories | 2,049.2 | 1,989.6 | 2,078.2 | ||||||||
| Assets held-for-sale | 40.4 | 25.0 | 45.7 | ||||||||
| Other current assets | 419.6 | 352.9 | 365.1 | ||||||||
| Total current assets | 5,775.6 | 5,823.1 | 6,326.5 | ||||||||
| Property, plant and equipment, net | 3,035.6 | 3,369.0 | 3,840.5 | ||||||||
| Goodwill | 1,679.9 | 1,679.9 | 1,641.6 | ||||||||
| Intangible assets, net | 332.2 | 343.9 | 309.2 | ||||||||
| Deferred tax assets | 933.2 | 929.1 | 745.5 | ||||||||
| ROU financing lease assets | — | 23.1 | 39.9 | ||||||||
| Other assets | 254.3 | 356.0 | 350.7 | ||||||||
| Total assets | $ | 12,010.8 | $ | 12,524.1 | $ | 13,253.9 | |||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Accounts payable | $ | 486.1 | $ | 572.3 | $ | 496.6 | |||||
| Accrued expenses and other current liabilities | 698.7 | 714.9 | 781.3 | ||||||||
| Current portion of financing lease liabilities | 0.5 | 0.5 | 0.4 | ||||||||
| Total current liabilities | 1,185.3 | 1,287.7 | 1,278.3 | ||||||||
| Long-term debt | 2,982.9 | 2,980.5 | 3,348.3 | ||||||||
| Deferred tax liabilities | 46.5 | 41.7 | 45.6 | ||||||||
| Long-term financing lease liabilities | 23.1 | 23.8 | 21.6 | ||||||||
| Other long-term liabilities | 452.2 | 498.5 | 511.2 | ||||||||
| Total liabilities | 4,690.0 | 4,832.2 | 5,205.0 | ||||||||
| ON Semiconductor Corporation stockholders’ equity: | |||||||||||
| Common stock | 6.3 | 6.2 | 6.2 | ||||||||
| Additional paid-in capital | 5,582.5 | 5,538.6 | 5,411.4 | ||||||||
| Accumulated other comprehensive loss | (61.7 | ) | (55.5 | ) | (56.5 | ) | |||||
| Accumulated earnings | 8,208.5 | 8,241.9 | 7,634.8 | ||||||||
| Less: Treasury stock, at cost | (6,433.9 | ) | (6,057.9 | ) | (4,966.0 | ) | |||||
| Total ON Semiconductor Corporation stockholders’ equity | 7,301.7 | 7,673.3 | 8,029.9 | ||||||||
| Non-controlling interest | 19.1 | 18.6 | 19.0 | ||||||||
| Total stockholders’ equity | 7,320.8 | 7,691.9 | 8,048.9 | ||||||||
| Total liabilities and stockholders’ equity | $ | 12,010.8 | $ | 12,524.1 | $ | 13,253.9 | |||||
ON SEMICONDUCTOR CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
| Quarters Ended | |||||||||||
| April 3, 2026 | December 31, 2025 | April 4, 2025 | |||||||||
| Cash flows from operating activities: | |||||||||||
| Net income (loss) | $ | (32.9 | ) | $ | 181.8 | $ | (485.2 | ) | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 286.7 | 214.9 | 168.2 | ||||||||
| (Gain) loss on sale and disposal of fixed assets | (1.1 | ) | 7.9 | 0.2 | |||||||
| Amortization of debt discount and issuance costs | 2.9 | 2.8 | 2.9 | ||||||||
| Share-based compensation | 37.3 | 37.8 | 33.9 | ||||||||
| Non-cash asset impairment charges | 147.0 | 8.1 | 431.5 | ||||||||
| Change in deferred tax balances | 2.7 | (80.6 | ) | (13.7 | ) | ||||||
| Other | (2.2 | ) | (2.8 | ) | 1.6 | ||||||
| Changes in assets and liabilities | (201.3 | ) | 184.6 | 462.9 | |||||||
| Net cash provided by operating activities | 239.1 | 554.5 | 602.3 | ||||||||
| Cash flows from investing activities: | |||||||||||
| Payments for acquisition of property, plant, and equipment | (21.9 | ) | (69.1 | ) | (147.6 | ) | |||||
| Proceeds from sale of property, plant and equipment | 1.0 | 25.4 | 0.2 | ||||||||
| Purchase of short-term investments | (300.0 | ) | (250.0 | ) | (250.0 | ) | |||||
| Proceeds from the maturity of short-term investments | 300.0 | 250.0 | 300.0 | ||||||||
| Payments for acquisition of a business, net of cash acquired | — | (7.0 | ) | (117.5 | ) | ||||||
| Other | 4.2 | — | — | ||||||||
| Net cash used in investing activities | (16.7 | ) | (50.7 | ) | (214.9 | ) | |||||
| Cash flows from financing activities: | |||||||||||
| Proceeds for the issuance of common stock under the ESPP | 6.7 | 5.5 | 5.3 | ||||||||
| Payment of tax withholding for RSUs | (26.9 | ) | (1.6 | ) | (22.4 | ) | |||||
| Repurchase of common stock | (345.7 | ) | (450.2 | ) | (300.1 | ) | |||||
| Repayment of borrowings under debt agreements | — | (375.0 | ) | — | |||||||
| Payment of finance lease obligations | (0.1 | ) | (0.5 | ) | (0.4 | ) | |||||
| Other | — | (2.1 | ) | — | |||||||
| Net cash used in financing activities | (366.0 | ) | (823.9 | ) | (317.6 | ) | |||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (0.3 | ) | (4.9 | ) | 2.0 | ||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | (143.9 | ) | (325.0 | ) | 71.8 | ||||||
| Beginning cash, cash equivalents and restricted cash | 2,149.0 | 2,474.0 | 2,693.4 | ||||||||
| Ending cash, cash equivalents and restricted cash | $ | 2,005.1 | $ | 2,149.0 | $ | 2,765.2 | |||||
ON SEMICONDUCTOR CORPORATION
RECONCILIATION OF GAAP VERSUS NON-GAAP DISCLOSURES
(in millions, except per share and percentage data)
| Quarters Ended | |||||||||||||
| April 3, 2026 | December 31, 2025 | April 4, 2025 | |||||||||||
| Reconciliation of GAAP to non-GAAP gross profit: | |||||||||||||
| GAAP gross profit | $ | 583.1 | $ | 551.0 | $ | 293.8 | |||||||
| Special items: | |||||||||||||
| a) | Restructuring-related inventory and other charges | (1.0 | ) | 32.1 | 283.4 | ||||||||
| b) | Amortization of intangible assets | 1.2 | 1.2 | 1.3 | |||||||||
| c) | Amortization of fair market value step-up of inventory | — | 0.6 | — | |||||||||
| Total special items | 0.2 | 33.9 | 284.7 | ||||||||||
| Non-GAAP gross profit | $ | 583.3 | $ | 584.9 | $ | 578.5 | |||||||
| Reconciliation of GAAP to non-GAAP gross margin: | |||||||||||||
| GAAP gross margin | 38.5 | % | 36.0 | % | 20.3 | % | |||||||
| Special items: | |||||||||||||
| a) | Restructuring-related inventory and other charges | (0.1 | )% | 2.1 | % | 19.6 | % | ||||||
| b) | Amortization of intangible assets | 0.1 | % | 0.1 | % | 0.1 | % | ||||||
| Total special items | — | % | 2.2 | % | 19.7 | % | |||||||
| Non-GAAP gross margin | 38.5 | % | 38.2 | % | 40.0 | % | |||||||
| Reconciliation of GAAP to non-GAAP operating expenses: | |||||||||||||
| GAAP operating expenses | $ | 636.5 | $ | 350.9 | $ | 867.5 | |||||||
| Special items: | |||||||||||||
| a) | Amortization of intangible assets | (10.5 | ) | (10.8 | ) | (11.4 | ) | ||||||
| b) | Restructuring, asset impairments and other charges, net | (329.3 | ) | (58.8 | ) | (539.3 | ) | ||||||
| c) | Third-party acquisition and divestiture-related costs | (1.4 | ) | (0.6 | ) | (2.3 | ) | ||||||
| d) | Adjustments to contingent consideration | (1.6 | ) | 1.3 | — | ||||||||
| Total special items | (342.8 | ) | (68.9 | ) | (553.0 | ) | |||||||
| Non-GAAP operating expenses | $ | 293.7 | $ | 282.0 | $ | 314.5 | |||||||
| Reconciliation of GAAP to non-GAAP operating income: | |||||||||||||
| GAAP operating income (loss) | $ | (53.4 | ) | $ | 200.1 | $ | (573.7 | ) | |||||
| Special items: | |||||||||||||
| a) | Restructuring-related inventory and other charges | (1.0 | ) | 32.1 | 283.4 | ||||||||
| b) | Amortization of intangible assets | 11.7 | 12.0 | 12.7 | |||||||||
| c) | Restructuring, asset impairments and other charges, net | 329.3 | 58.8 | 539.3 | |||||||||
| d) | Third-party acquisition and divestiture-related costs | 1.4 | 0.6 | 2.3 | |||||||||
| e) | Amortization of fair market value step-up of inventory | — | 0.6 | — | |||||||||
| f) | Adjustments to contingent consideration | 1.6 | (1.3 | ) | — | ||||||||
| Total special items | 343.0 | 102.8 | 837.7 | ||||||||||
| Non-GAAP operating income | $ | 289.6 | $ | 302.9 | $ | 264.0 | |||||||
| Reconciliation of GAAP to non-GAAP operating margin (operating income / revenue): | |||||||||||||
| GAAP operating margin | (3.5 | )% | 13.1 | % | (39.7 | )% | |||||||
| Special items: | |||||||||||||
| a) | Restructuring related inventory and other charges | (0.1 | )% | 2.1 | % | 19.6 | % | ||||||
| b) | Amortization of intangible assets | 0.8 | % | 0.8 | % | 0.9 | % | ||||||
| c) | Restructuring, asset impairments and other charges, net | 21.8 | % | 3.8 | % | 37.3 | % | ||||||
| d) | Third-party acquisition and divestiture-related costs | 0.1 | % | — | % | 0.2 | % | ||||||
| e) | Amortization of fair market value step-up of inventory | — | % | — | % | — | % | ||||||
| f) | Adjustments to contingent consideration | 0.1 | % | — | % | — | % | ||||||
| Total special items | 22.7 | % | 6.7 | % | 58.0 | % | |||||||
| Non-GAAP operating margin | 19.1 | % | 19.8 | % | 18.3 | % | |||||||
| Reconciliation of GAAP to non-GAAP income before income taxes: | |||||||||||||
| GAAP income (loss) before income taxes | $ | (44.6 | ) | $ | 217.1 | $ | (561.0 | ) | |||||
| Special items: | |||||||||||||
| a) | Restructuring-related inventory and other charges | (1.0 | ) | 32.1 | 283.4 | ||||||||
| b) | Amortization of intangible assets | 11.7 | 12.0 | 12.7 | |||||||||
| c) | Restructuring, asset impairments and other charges, net | 329.3 | 58.8 | 539.3 | |||||||||
| d) | Third-party acquisition and divestiture-related costs | 1.4 | 0.6 | 2.3 | |||||||||
| e) | Amortization of fair market value step-up of inventory | — | 0.6 | — | |||||||||
| f) | Adjustments to contingent consideration | 1.6 | (1.3 | ) | — | ||||||||
| g) | Actuarial gains on pension plans and other pension benefits | — | (12.9 | ) | — | ||||||||
| Total special items | 343.0 | 89.9 | 837.7 | ||||||||||
| Non-GAAP income before income taxes | $ | 298.4 | $ | 307.0 | $ | 276.7 | |||||||
| Reconciliation of GAAP to non-GAAP net income attributable to ON Semiconductor Corporation: | |||||||||||||
| GAAP net income (loss) attributable to ON Semiconductor Corporation | $ | (33.4 | ) | $ | 181.8 | $ | (486.1 | ) | |||||
| Special items: | |||||||||||||
| a) | Restructuring-related inventory and other charges | (1.0 | ) | 32.1 | 283.4 | ||||||||
| b) | Amortization of intangible assets | 11.7 | 12.0 | 12.7 | |||||||||
| c) | Restructuring, asset impairments and other charges, net | 329.3 | 58.8 | 539.3 | |||||||||
| d) | Third-party acquisition and divestiture-related costs | 1.4 | 0.6 | 2.3 | |||||||||
| e) | Amortization of fair market value step-up of inventory | — | 0.6 | — | |||||||||
| f) | Adjustments to contingent consideration | 1.6 | (1.3 | ) | — | ||||||||
| g) | Actuarial gains on pension plans and other pension benefits | — | (12.9 | ) | — | ||||||||
| h) | Adjustment to Income taxes | (56.5 | ) | (14.5 | ) | (120.0 | ) | ||||||
| Total special items | 286.5 | 75.4 | 717.7 | ||||||||||
| Non-GAAP net income attributable to ON Semiconductor Corporation | $ | 253.1 | $ | 257.2 | $ | 231.6 | |||||||
| Reconciliation of GAAP to non-GAAP diluted shares outstanding: | |||||||||||||
| GAAP diluted shares outstanding | 394.1 | 402.3 | 421.3 | ||||||||||
| Special items: | |||||||||||||
| a) | Add: dilutive shares attributable to share-based awards | 1.9 | — | 0.4 | |||||||||
| Total special items | 1.9 | — | 0.4 | ||||||||||
| Non-GAAP diluted shares outstanding | 396.0 | 402.3 | 421.7 | ||||||||||
| Non-GAAP diluted earnings per share: | |||||||||||||
| Non-GAAP net income attributable to ON Semiconductor Corporation | $ | 253.1 | $ | 257.2 | $ | 231.6 | |||||||
| Non-GAAP diluted shares outstanding | 396.0 | 402.3 | 421.7 | ||||||||||
| Non-GAAP diluted earnings per share | $ | 0.64 | $ | 0.64 | $ | 0.55 | |||||||
| Reconciliation of net cash provided by operating activities to free cash flow: | |||||||||||||
| Net cash provided by operating activities | $ | 239.1 | $ | 554.5 | $ | 602.3 | |||||||
| Special items: | |||||||||||||
| a) | Payments for acquisition of property, plant and equipment | (21.9 | ) | (69.1 | ) | (147.6 | ) | ||||||
| Total special items | (21.9 | ) | (69.1 | ) | (147.6 | ) | |||||||
| Free cash flow | $ | 217.2 | $ | 485.4 | $ | 454.7 | |||||||
Certain of the amounts in the above tables may not total due to rounding of individual amounts.
ON SEMICONDUCTOR CORPORATION
RECONCILIATION OF GAAP VERSUS NON-GAAP DISCLOSURES
(in millions, except per share and percentage data)
FREE CASH FLOW
| Quarters Ended | |||||||||||||||||||
| July 4, 2024 | October 3, 2025 | December 31, 2025 | April 3, 2026 | Last Twelve Months | |||||||||||||||
| Net cash provided by operating activities | $ | 184.3 | $ | 418.7 | $ | 554.5 | $ | 239.1 | $ | 1,396.6 | |||||||||
| Payments for acquisition of property, plant and equipment | (78.2 | ) | (46.3 | ) | (69.1 | ) | (21.9 | ) | (215.5 | ) | |||||||||
| Free cash flow | $ | 106.1 | $ | 372.4 | $ | 485.4 | $ | 217.2 | $ | 1,181.1 | |||||||||
| Revenue | $ | 1,468.7 | $ | 1,550.9 | $ | 1,530.1 | $ | 1,513.3 | $ | 6,063.0 | |||||||||
SHARE-BASED COMPENSATION
Total share-based compensation related to restricted stock units, stock grant awards and the employee stock purchase plan was as follows:
| Quarters Ended | ||||||||
| April 3, 2026 | December 31, 2025 | April 4, 2025 | ||||||
| Cost of revenue | $ | 6.4 | $ | 7.1 | $ | 6.0 | ||
| Research and development | 7.3 | 7.6 | 6.3 | |||||
| Selling and marketing | 5.1 | 5.5 | 4.7 | |||||
| General and administrative | 18.5 | 17.6 | 16.9 | |||||
| Total share-based compensation | $ | 37.3 | $ | 37.8 | $ | 33.9 | ||
SUPPLEMENTAL FINANCIAL DATA
| Quarters Ended | ||||||||
| April 3, 2026 | December 31, 2025 | April 4, 2025 | ||||||
| Net cash provided by operating activities | $ | 239.1 | $ | 554.5 | $ | 602.3 | ||
| Free cash flow | $ | 217.2 | $ | 485.4 | $ | 454.7 | ||
| Cash paid for income taxes | $ | 46.6 | $ | 63.7 | $ | 21.5 | ||
| Depreciation and amortization (1) | $ | 286.7 | $ | 214.9 | $ | 168.2 | ||
| Less: Amortization of intangible assets | 11.7 | 12.0 | 12.7 | |||||
| Depreciation and amortization (excl. amortization of intangible assets) (1) | $ | 275.0 | $ | 202.9 | $ | 155.5 | ||
(1) Includes
To supplement the consolidated financial results prepared in accordance with GAAP, onsemi uses certain non-GAAP measures, which are adjusted from the most directly comparable GAAP measures to exclude items related to the amortization of acquisition-related intangibles, restructuring-related cost of revenue charges, expensing of appraised inventory fair market value step-up, inventory valuation adjustments, in-process research and development expenses, restructuring, asset impairments and other, net, goodwill impairment charges, gains and losses on debt prepayment, non-cash interest expense, actuarial (gains) losses on pension plans and other pension benefits, third party acquisition and divestiture-related costs, tax impact of these items and certain other non-recurring items, as necessary. Management does not consider the effects of these items in evaluating the core operational activities of onsemi. Management uses these non-GAAP measures internally to make strategic decisions, forecast future results and evaluate onsemi’s current performance. In addition, the Company believes that most analysts covering onsemi use the non-GAAP measures to evaluate onsemi’s performance. Given management’s and other relevant parties’ use of these non-GAAP measures, onsemi believes these measures are important to investors in understanding onsemi’s current and future operating results as seen through the eyes of management. In addition, management believes these non-GAAP measures are useful to investors in enabling them to better assess changes in onsemi’s core business across different time periods. These non-GAAP measures are not prepared in accordance with, and should not be considered alternatives or necessarily superior to, GAAP financial data and may be different from non-GAAP measures used by other companies. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures, even if they have similar names.
Non-GAAP Gross Profit and Gross Margin
The use of non-GAAP gross profit and gross margin allows management to evaluate, among other things, the gross profit and gross margin of the Company’s core businesses and trends across different reporting periods on a consistent basis, independent of non-cash and non-recurring items including, generally speaking, restructuring-related cost of revenue charges, amortization of intangible assets, amortization of appraised inventory fair market value step-up, impact of business wind down and non-recurring facility costs. In addition, it is an important component of management’s internal performance measurement and incentive and reward process as it is used to assess the current and historical financial results of the business and for strategic decision making, preparing budgets, obtaining targets and forecasting future results. Management presents this non-GAAP financial measure to enable investors and analysts to evaluate our operating performance independent of certain non-cash items and the effects of certain variables unrelated to our overall operating performance.
Non-GAAP Operating Income and Operating Margin
The use of non-GAAP operating income and operating margin allows management to evaluate, among other things, the operating income and operating margin of the Company’s core businesses and trends across different reporting periods on a consistent basis, independent of non-cash and non-recurring items including, generally speaking, restructuring-related cost of revenue charges, expensing of appraised inventory fair market value step-up, impact of business wind down, non-recurring facility costs, amortization and impairments of intangible assets, third party acquisition and divestiture-related costs, restructuring charges, asset impairments and certain other special items as necessary. In addition, it is an important component of management’s internal performance measurement and incentive and reward process as it is used to assess the current and historical financial results of the business and for strategic decision making, preparing budgets, obtaining targets and forecasting future results. Management presents this non-GAAP financial measure to enable investors and analysts to evaluate our operating performance independent of certain non-cash items and the effects of certain variables unrelated to our overall operating performance.
Non-GAAP Net Income Attributable to ON Semiconductor Corporation and Non-GAAP Diluted Earnings Per Share
The use of non-GAAP net income attributable to ON Semiconductor Corporation and non-GAAP diluted earnings per share allows management to evaluate the operating results of onsemi’s core businesses and trends across different reporting periods on a consistent basis, independent of non-cash and non-recurring items including, generally, the restructuring related cost of revenue charges, amortization and impairments of intangible assets, expensing of appraised inventory fair market value step-up, impact of business wind down, non-recurring facility costs, restructuring, asset impairments, gains and losses on debt prepayment, actuarial (gains) losses on pension plans and other pension benefits, third party acquisition and divestiture-related costs, discrete tax items and other non-GAAP tax adjustments and certain other special items, as necessary. In addition, these measures are important components of management’s internal performance measurement and incentive and reward process, as they are used to assess the current and historical financial results of the business and for strategic decision making, preparing budgets, setting targets and forecasting future results. For our non-GAAP reporting we apply a projected, normalized non-GAAP effective tax rate of
Free Cash Flow
The use of free cash flow allows management to evaluate, among other things, the ability of the Company to make interest or principal payments on its debt. Free cash flow is defined as the difference between cash flow from operating activities and capital expenditures disclosed under investing activities in the consolidated statement of cash flows. Free cash flow is not an alternative to cash flow from operating activities as a measure of liquidity. It is an important component of management’s internal performance measurement and incentive and reward process as it is used to assess the current and historical financial results of the business and for strategic decision making, preparing budgets, obtaining targets and forecasting future results. Management presents this non-GAAP financial measure to enable investors and analysts to evaluate our financial performance independent of the cash capital expenditures.
Non-GAAP Diluted Share Count
The use of non-GAAP diluted share count allows management to evaluate, among other things, the potential dilution due to the outstanding restricted stock units excluding the dilution from the convertible notes that is covered by hedging activity up to a certain threshold. In periods when the quarterly average stock price per share exceeds
