ON Semiconductor (NASDAQ: ON) narrows loss as margins rebound and buybacks grow
Filing Impact
Filing Sentiment
Form Type
10-Q
Rhea-AI Filing Summary
ON Semiconductor reported a smaller loss for the quarter ended April 3, 2026 as profitability improved despite heavy restructuring. Revenue rose to $1,513.3 million from $1,445.7 million, driven by growth in automotive and industrial demand, especially in the Power Solutions Group.
Gross profit nearly doubled to $583.1 million, lifting gross margin to 38.5% from 20.3%, largely because prior‑year excess and obsolete inventory charges did not recur and manufacturing utilization improved. Segment margins strengthened notably in Intelligent Sensing, which moved from a loss to solid profitability.
The company still posted a net loss attributable to shareholders of $33.4 million, or $0.08 per share, but this was much better than the $486.1 million loss, or $1.15 per share, a year earlier. Results were weighed down by $329.3 million of restructuring, asset impairment and other charges tied to multi‑year manufacturing realignment, including workforce reductions and asset write‑downs in South Korea and the Czech Republic.
Operating cash flow was $239.1 million, down from $602.3 million mainly due to working‑capital swings. ON ended the quarter with $2,003.6 million of cash and equivalents plus $400.0 million of short‑term investments, against $3,004.9 million of gross long‑term debt. The company also repurchased about 5.7 million shares for $348.6 million, leaving roughly $5.7 billion authorized under its current buyback program.
Positive
- Sharp margin and earnings improvement: Gross margin expanded from 20.3% to 38.5%, and net loss narrowed from $486.1 million to $33.4 million, reflecting better utilization and the absence of prior-year inventory and consumables write-offs.
- Robust contractual revenue visibility: Long-term supply agreements carried remaining performance obligations of about $6.5 billion, with roughly 35% expected to be recognized as revenue over the next 12 months.
- Strong liquidity and capital return: ON held about $2.4 billion in cash and short-term investments and still has an undrawn $1.5 billion revolver, while repurchasing 5.7 million shares for $348.6 million and retaining about $5.7 billion of buyback authorization.
Negative
- Large ongoing restructuring and impairment charges: The quarter included $329.3 million of restructuring, asset impairments and other costs tied to manufacturing realignment, including $147.0 million of equipment write-downs and $162.1 million of accelerated depreciation and amortization.
- Workforce reductions and asset rationalization: The 2026 Manufacturing Realignment Program plans to cut approximately 650 employees and dispose of manufacturing assets in South Korea and the Czech Republic, highlighting structural shifts and execution risk in the footprint transition.
- Weaker operating cash flow: Operating cash flow declined to $239.1 million from $602.3 million, as working-capital changes more than offset improved earnings, even while the company continued significant share repurchases.
Insights
Margins rebounded sharply and losses narrowed, but heavy restructuring and cash flow pressure remain important offsets.
ON Semiconductor grew quarterly revenue about 5% to $1.51 billion, but the standout change was profitability. Gross profit almost doubled, and gross margin rose to 38.5% as 2025’s large inventory write‑downs did not repeat and utilization improved, especially in Intelligent Sensing.
Despite booking $329.3 million of restructuring, impairment and other charges from its multi‑year manufacturing realignment, the company cut its net loss to $33.4 million. These charges include $147.0 million of equipment impairments and $162.1 million of accelerated depreciation and amortization, reflecting a significant shift in the manufacturing footprint and a reduction of about 650 employees.
Operating cash flow fell to $239.1 million from $602.3 million, driven by working‑capital movements, even as liquidity stayed strong with roughly $2.4 billion in cash and short‑term investments and an undrawn $1.5 billion revolver. The company continued buying back shares, spending $348.6 million this quarter, while maintaining $6.5 billion of long‑term supply agreement obligations, about 35% of which are expected as revenue over the next 12 months.
Key Figures
Revenue: $1,513.3 million
Gross profit: $583.1 million
Gross margin: 38.5%
+5 more
8 metrics
Revenue
$1,513.3 million
Quarter ended April 3, 2026
Gross profit
$583.1 million
Quarter ended April 3, 2026
Gross margin
38.5%
Quarter ended April 3, 2026, vs 20.3% prior-year quarter
Net loss attributable to ON Semiconductor
$33.4 million
Quarter ended April 3, 2026
Restructuring, impairments and other
$329.3 million
Quarter ended April 3, 2026, tied to manufacturing realignment
Operating cash flow
$239.1 million
Quarter ended April 3, 2026
Share repurchases
$348.6 million
5.7 million shares repurchased in quarter ended April 3, 2026
LTSAs remaining performance obligations
$6.5 billion
As of April 3, 2026, about 35% expected in next 12 months
Key Terms
Long-term Supply Agreements, 0% Convertible Senior Notes due 2027, Manufacturing Realignment Program, restricted stock unit, +2 more
6 terms
Long-term Supply Agreements financial
"Certain of the Company's customer contracts are multi-year agreements that include committed amounts ("Long-term Supply Agreements" or "LTSAs")"
0% Convertible Senior Notes due 2027 financial
"0% Notes | 0% Convertible Senior Notes due 2027"
Manufacturing Realignment Program financial
"2026 Manufacturing Realignment Program represent new restructuring activities that expand upon the Company’s 2025 Manufacturing Realignment Program"
restricted stock unit financial
"RSU | Restricted stock unit"
A restricted stock unit is a promise from a company to give an employee shares of stock after certain conditions are met, like staying with the company for a set amount of time. It’s like earning a bonus that turns into company stock once you’ve proven your commitment, making it a way to motivate and reward employees.
cash flow hedges financial
"The Company maintains a foreign currency cash flow hedging program to reduce the risk"
A cash flow hedge is an accounting label companies use when they enter financial contracts—like currency or interest-rate agreements—to protect expected future cash payments or receipts from unpredictable moves. For investors, it signals that the company is trying to smooth out future cash variability (think of locking in a price to avoid surprises), which can reduce reported profit swings but also means the company has exposure to derivative instruments and their associated risks.
contingent consideration financial
"The maximum contingent cash consideration to be distributed is $144.0 million. Contingent consideration is classified as Level 3"
Contingent consideration is an additional payment agreed when one company buys another that will be paid later only if specific future targets are met, such as revenue, profit, or regulatory milestones. It matters to investors because it shifts risk between buyer and seller and affects the acquiring company's future cash flow and reported value — like promising a bonus after results are proven.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended April 3, 2026
Or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
(Commission File Number) 001-39317
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(602 ) 244-6600
(Address, zip code and telephone number, including area code, of principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
☒ | Accelerated filer | ☐ | |||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
| Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x
The number of shares of the issuer's common stock outstanding at April 29, 2026 was 391,903,191 .
Table of Contents
ON SEMICONDUCTOR CORPORATION FORM 10-Q
TABLE OF CONTENTS
Part I: Financial Information
Item 1. Financial Statements (unaudited) | 4 | |||||||
Consolidated Balance Sheets | 4 | |||||||
Consolidated Statements of Operations and Comprehensive Income | 5 | |||||||
Consolidated Statements of Stockholders' Equity | 6 | |||||||
Consolidated Statements of Cash Flows | 7 | |||||||
Notes to Consolidated Financial Statements | 8 | |||||||
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | 25 | |||||||
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 31 | |||||||
Item 4. Controls and Procedures | 31 | |||||||
Part II: Other Information
Item 1. Legal Proceedings | 31 | |||||||
Item 1A. Risk Factors | 31 | |||||||
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 33 | |||||||
Item 3. Defaults Upon Senior Securities | 33 | |||||||
Item 4. Mine Safety Disclosures | 33 | |||||||
Item 5. Other Information | 33 | |||||||
Item 6. Exhibits | 34 | |||||||
Signatures | 35 | |||||||
(See the glossary of selected terms immediately following this table of contents for definitions of certain abbreviated terms.)
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ON SEMICONDUCTOR CORPORATION
FORM 10-Q
GLOSSARY OF SELECTED ABBREVIATED TERMS*
| Abbreviated Term | Defined Term | |||||||
| 0% Notes | 0% Convertible Senior Notes due 2027 | |||||||
| 0.50% Notes | 0.50% Convertible Senior Notes due 2029 | |||||||
| 3.875% Notes | 3.875% Senior Notes due 2028 | |||||||
| ADAS | Advanced driver-assistance systems | |||||||
| AI | Artificial Intelligence | |||||||
| Amended and Restated SIP | ON Semiconductor Corporation Amended and Restated Stock Incentive Plan, as amended | |||||||
| ASU | Accounting Standards Update | |||||||
| Commission or SEC | Securities and Exchange Commission | |||||||
| Credit Agreement | Credit agreement, dated as of June 22, 2023, by and among the Company, as borrower, the several lenders party thereto, JP Morgan Chase Bank, N.A., as administrative agent, and certain other parties, providing for the Revolving Credit Facility | |||||||
| EFK | East Fishkill, New York fabrication facility | |||||||
| ESPP | ON Semiconductor Corporation 2000 Employee Stock Purchase Plan, as amended | |||||||
| Exchange Act | Securities Exchange Act of 1934, as amended | |||||||
| IP | Intellectual property | |||||||
| IRS | United States Internal Revenue Service | |||||||
| IT | Information Technology | |||||||
| Revolving Credit Facility | A $1.5 billion senior revolving credit facility created pursuant to the Credit Agreement | |||||||
| ROU | Right-of-use | |||||||
| RSU | Restricted stock unit | |||||||
| SiC | Silicon carbide | |||||||
| SiC JFET | Silicon Carbide Junction Field-Effect Transistor | |||||||
| Securities Act | Securities Act of 1933, as amended | |||||||
| U.S. or United States | United States of America | |||||||
* Terms used, but not defined, within the body of the Form 10-Q are defined in this Glossary.
Table of Contents
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
ON SEMICONDUCTOR CORPORATION
CONSOLIDATED BALANCE SHEETS
(in millions, except share and per share data)
(unaudited)
| April 3, 2026 | December 31, 2025 | ||||||||||
| Assets | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Short-term investments | |||||||||||
| Receivables, net | |||||||||||
| Inventories | |||||||||||
| Assets held-for-sale | |||||||||||
| Other current assets | |||||||||||
| Total current assets | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Goodwill | |||||||||||
| Intangible assets, net | |||||||||||
| Deferred tax assets | |||||||||||
| ROU financing lease assets | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued expenses and other current liabilities | |||||||||||
| Current portion of financing lease liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt | |||||||||||
| Deferred tax liabilities | |||||||||||
| Long-term financing lease liabilities | |||||||||||
| Other long-term liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies (Note 10) | |||||||||||
| ON Semiconductor Corporation stockholders’ equity: | |||||||||||
Common stock ($ | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Accumulated earnings | |||||||||||
Less: Treasury stock, at cost: | ( | ( | |||||||||
| Total ON Semiconductor Corporation stockholders’ equity | |||||||||||
| Non-controlling interest | |||||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities and stockholders’ equity | $ | $ | |||||||||
See accompanying notes to consolidated financial statements
4
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ON SEMICONDUCTOR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(in millions, except per share data)
(unaudited)
| Quarters Ended | |||||||||||
| April 3, 2026 | April 4, 2025 | ||||||||||
| Revenue | $ | $ | |||||||||
| Cost of revenue | |||||||||||
| Gross profit | |||||||||||
| Operating expenses: | |||||||||||
| Research and development | |||||||||||
| Selling and marketing | |||||||||||
| General and administrative | |||||||||||
| Amortization of intangible assets | |||||||||||
| Restructuring, asset impairments and other, net | |||||||||||
| Total operating expenses | |||||||||||
| Operating loss | ( | ( | |||||||||
| Other income (expense), net: | |||||||||||
| Interest expense | ( | ( | |||||||||
| Interest income | |||||||||||
| Other income | |||||||||||
| Other income (expense), net | |||||||||||
| Loss before income taxes | ( | ( | |||||||||
| Income tax benefit | |||||||||||
| Net loss | ( | ( | |||||||||
| Less: Net income attributable to non-controlling interest | ( | ( | |||||||||
| Net loss attributable to ON Semiconductor Corporation | $ | ( | $ | ( | |||||||
| Net loss per share of common stock attributable to ON Semiconductor Corporation: | |||||||||||
| Basic | $ | ( | $ | ( | |||||||
| Diluted | $ | ( | $ | ( | |||||||
| Weighted-average shares of common stock outstanding: | |||||||||||
| Basic | |||||||||||
| Diluted | |||||||||||
| Comprehensive loss, net of tax: | |||||||||||
| Net loss | $ | ( | $ | ( | |||||||
| Foreign currency translation adjustments | ( | ||||||||||
| Effects of cash flow hedges and other adjustments | ( | ||||||||||
| Other comprehensive income (loss), net of tax | ( | ||||||||||
| Comprehensive loss | ( | ( | |||||||||
| Comprehensive income attributable to non-controlling interest | ( | ( | |||||||||
| Comprehensive loss attributable to ON Semiconductor Corporation | $ | ( | $ | ( | |||||||
See accompanying notes to consolidated financial statements
5
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ON SEMICONDUCTOR CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in millions, except share data)
(unaudited)
| Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Treasury Stock | Non-Controlling Interest | |||||||||||||||||||||||||||||||||||||||||||||||||
| Number of shares | At Par Value | Accumulated Earnings | Number of shares | At Cost | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | ( | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Shares issued pursuant to the ESPP | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| RSUs released and stock grant awards issued | ( | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Payment of tax withholding for RSUs | — | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of common stock | — | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Comprehensive income (loss) | — | — | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Balance at April 3, 2026 | $ | $ | $ | ( | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Treasury Stock | Non-Controlling Interest | |||||||||||||||||||||||||||||||||||||||||||||||||
| Number of shares | At Par Value | Accumulated Earnings | Number of shares | At Cost | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | ( | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Shares issued pursuant to the ESPP | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| RSUs released and stock grant awards issued | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Partial settlement - | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Partial settlement of warrants - | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Payment of tax withholding for RSUs | — | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of common stock | — | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Comprehensive income (loss) | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Balance at April 4, 2025 | $ | $ | $ | ( | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements
6
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ON SEMICONDUCTOR CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
| Quarters Ended | |||||||||||
| April 3, 2026 | April 4, 2025 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net loss | $ | ( | $ | ( | |||||||
| Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| (Gain) loss on sale or disposal of fixed assets | ( | ||||||||||
| Amortization of debt discount and issuance costs | |||||||||||
| Share-based compensation | |||||||||||
| Non-cash asset impairment charges | |||||||||||
| Change in deferred tax balances | ( | ||||||||||
| Other | ( | ||||||||||
| Changes in assets and liabilities (exclusive of acquisitions): | |||||||||||
| Receivables | |||||||||||
| Inventories | ( | ||||||||||
| Other assets | ( | ( | |||||||||
| Accounts payable | ( | ||||||||||
| Accrued expenses and other current liabilities | ( | ||||||||||
| Other long-term liabilities | ( | ( | |||||||||
| Net cash provided by operating activities | |||||||||||
| Cash flows from investing activities: | |||||||||||
| Payments for acquisition of property, plant and equipment | ( | ( | |||||||||
| Proceeds from sale of property, plant and equipment | |||||||||||
| Purchase of short-term investments | ( | ( | |||||||||
| Proceeds from the maturity of short-term investments | |||||||||||
| Payments for acquisition of a business, net of cash acquired | ( | ||||||||||
| Other | |||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds for the issuance of common stock under the ESPP | |||||||||||
| Payment of tax withholding for RSUs | ( | ( | |||||||||
| Repurchase of common stock | ( | ( | |||||||||
| Payment of financing lease obligations | ( | ( | |||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | ( | ||||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | ( | ||||||||||
| Cash, cash equivalents and restricted cash, beginning of period (Note 6) | |||||||||||
| Cash, cash equivalents and restricted cash, end of period (Note 6) | $ | $ | |||||||||
See accompanying notes to consolidated financial statements
7
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ON SEMICONDUCTOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1: Background and Basis of Presentation
ON Semiconductor Corporation ("onsemi," "we," "us," "our," or the "Company"), with its wholly and majority-owned subsidiaries, operates under the onsemiTM brand. The Company is organized into three
The Company's fiscal calendar year begins on January 1 and ends on December 31, with each fiscal quarter containing a thirteen-week accounting period. The quarters ended April 3, 2026 and April 4, 2025 contained 93 days and 94 days, respectively.
The accompanying unaudited financial statements as of and for the quarter ended April 3, 2026 have been prepared following generally accepted accounting principles in the United States of America ("GAAP") for interim financial reporting and the rules and regulations of the SEC for interim reporting. Accordingly, the unaudited financial statements do not include all of the information and footnotes required by GAAP for audited financial statements. The balance sheet as of December 31, 2025 was derived from the Company's audited financial statements but does not include all disclosures required by GAAP for annual financial statements. In management's opinion, the interim information contains all adjustments, which include normal recurring adjustments necessary for a fair statement of the results for the interim periods. The footnote disclosures related to the interim financial information contained herein are also unaudited. Such financial information should be read in conjunction with the consolidated financial statements and related notes thereto for the year ended December 31, 2025, included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on February 9, 2026 (the "2025 Form 10-K"). Certain reclassifications within the Statements of Cash Flows have been made to prior period amounts to conform to current period presentation.
Use of Estimates
The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities as of the date of the financial statements and the reported amount of revenue and expenses during the reporting period. Management evaluates these estimates and judgments on an ongoing basis and bases its estimates on experience, current and expected future conditions, third-party evaluations and various other assumptions that management believes are reasonable under the circumstances. Significant estimates have been used by management in conjunction with the following: (i) calculation of future payouts for customer incentives and amounts subject to allowances and returns; (ii) valuation and obsolescence relating to inventories; (iii) measurement of valuation allowances against deferred tax assets and evaluations of uncertain tax positions; (iv) assumptions used in business combinations and the valuation of assets held-for-sale; and (v) testing for impairment of long-lived assets and goodwill. Actual results may differ from the estimates and assumptions used in the consolidated financial statements.
Note 2: Segments and Revenue
Segments
The Company is organized into three
8
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ON SEMICONDUCTOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(unaudited)
Revenue and gross profit for the operating and reportable segments were as follows (in millions):
| PSG | AMG | ISG | Total | ||||||||||||||||||||
For the quarter ended April 3, 2026: | |||||||||||||||||||||||
| Revenue from external customers | $ | $ | $ | $ | |||||||||||||||||||
| Cost of revenue | |||||||||||||||||||||||
| Segment gross profit | $ | $ | $ | $ | |||||||||||||||||||
For the quarter ended April 4, 2025: | |||||||||||||||||||||||
| Revenue from external customers | $ | $ | $ | $ | |||||||||||||||||||
| Cost of revenue | |||||||||||||||||||||||
| Segment gross profit (loss) | $ | $ | $ | ( | $ | ||||||||||||||||||
The Company had one customer, a distributor, whose revenue accounted for approximately 12 % and 10 % of total revenue for the quarters ended April 3, 2026 and April 4, 2025, respectively, across all reportable segments. No single customer accounted for more than 10% of the Company's accounts receivable balance as of April 3, 2026, and one customer, a distributor, accounted for approximately 10 % of the Company's accounts receivable balance as of December 31, 2025.
Revenue for the operating and reportable segments disaggregated into geographic locations based on sales billed from the respective country and sales channel was as follows (in millions):
| Quarter Ended April 3, 2026 | |||||||||||||||||||||||
| PSG | AMG | ISG | Total | ||||||||||||||||||||
| Geographic Location: | |||||||||||||||||||||||
| United Kingdom | $ | $ | $ | $ | |||||||||||||||||||
| Hong Kong | |||||||||||||||||||||||
| Singapore | |||||||||||||||||||||||
| United States | |||||||||||||||||||||||
| Other | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| Sales Channel: | |||||||||||||||||||||||
| Distributors | $ | $ | $ | $ | |||||||||||||||||||
| Direct customers | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
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ON SEMICONDUCTOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(unaudited)
| Quarter Ended April 4, 2025 | |||||||||||||||||||||||
| PSG | AMG | ISG | Total | ||||||||||||||||||||
| Geographic Location: | |||||||||||||||||||||||
| United Kingdom | $ | $ | $ | $ | |||||||||||||||||||
| Hong Kong | |||||||||||||||||||||||
| Singapore | |||||||||||||||||||||||
| United States | |||||||||||||||||||||||
| Other | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| Sales Channel: | |||||||||||||||||||||||
| Distributors | $ | $ | $ | $ | |||||||||||||||||||
| Direct customers | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
The Company operates in various geographic locations. Sales to external customers have little correlation to where products are manufactured or the location of the end-customer. It is, therefore, not meaningful to present operating profit by geographical location.
Revenue
The Company's revenue is derived primarily from product sales and to a much lesser extent from product development agreements and non-recurring engineering ("NRE") arrangements. For each of the quarters ended April 3, 2026 and April 4, 2025, revenue recognized from product sales as a percentage of total revenue was approximately 99 1
Revenue disaggregated by end-markets and product technologies was as follows (in millions):
| Quarters Ended | |||||||||||
| April 3, 2026 | April 4, 2025 | ||||||||||
| End-Markets: | |||||||||||
| Automotive | $ | $ | |||||||||
| Industrial | |||||||||||
| Other* | |||||||||||
| Total | $ | $ | |||||||||
| * Other includes the end-markets of computing (including AI data center), consumer, networking, communications, etc. | |||||||||||
| Product Technologies: | |||||||||||
| Intelligent Power | $ | $ | |||||||||
| Intelligent Sensing | |||||||||||
| Other | |||||||||||
| Total | $ | $ | |||||||||
Remaining Performance Obligations
A portion of the Company's orders are firm commitments that are non-cancellable, including certain orders or contracts with a duration of less than one year. Certain of the Company's customer contracts are multi-year agreements that include committed amounts ("Long-term Supply Agreements" or "LTSAs") for which the remaining performance obligations as of April 3, 2026 were approximately $6.5 billion (excluding the remaining performance obligations for contracts having a duration of one year or less). If products are shipped according to the terms of these contracts, the Company expects to recognize approximately
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ON SEMICONDUCTOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(unaudited)
Certain LTSAs include non-cancellable capacity payments from the customer, which are generally due within 30 days of the agreement. These payments reserve production availability or are prepayments for the same purpose and are not recognized as revenue until the performance obligations are satisfied. Payments received in advance of the satisfaction of performance obligations are recorded as contract liabilities. The Company fulfilled certain performance obligations and recognized revenue of $15.4 million and $24.0 million for each of the quarters ended April 3, 2026 and April 4, 2025, respectively, related to contract liabilities outstanding as of the end of each respective prior year.
Contract Balances
Contract assets and contract liabilities were as follows (in millions):
| As of | |||||||||||
| April 3, 2026 | December 31, 2025 | ||||||||||
| Contract assets included in: | |||||||||||
| Other current assets | $ | $ | |||||||||
| Contract liabilities included in: | |||||||||||
| Accrued expenses and other current liabilities | $ | $ | |||||||||
| Other long-term liabilities | |||||||||||
| Total | $ | $ | |||||||||
Note 3: Recent Accounting Pronouncements and Other Developments
Pending Adoption
Income Statement (Subtopic 220-40): Reporting Comprehensive Income - Expense Disaggregation Disclosures ("ASU 2024-03")
In November 2024, the FASB issued ASU 2024-03, which requires public business entities to expand disclosures about specific expense categories. The amendments in this ASU require a public entity to disclose, in tabular format, in the notes to the financial statements, specific information about certain costs and expenses. Although the ASU does not change the expense captions an entity presents on the face of the statement of operations, it requires disaggregation of certain expense captions into specified categories. For public business entities, the provisions of ASU 2024-03 are effective for fiscal years beginning after December 15, 2026. Early adoption is permitted. Management is currently evaluating the requirements under this new standard.
Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software ("ASU 2025-06")
In September 2025, the FASB issued ASU 2025-06 to modernize the accounting for software costs that are accounted for under Subtopic 350-40, Intangibles - Goodwill and Other - Internal-Use Software. The guidance removes all references to project stages throughout ASC 350-40 and clarifies the threshold entities apply to begin capitalizing costs. For public business entities, the provisions of ASU 2025-06 are effective for fiscal years beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted. Management is currently evaluating the requirements under this new standard.
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ON SEMICONDUCTOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(unaudited)
Derivatives and Hedging (Topic 815): Hedge Accounting Improvements (ASU "2025-09")
In December 2025, the FASB issued ASU 2025-09 to amend certain aspects of its hedge accounting guidance to better reflect an entity’s risk management activities in the financial statements. The guidance expands the hedged risks permitted to be aggregated in a group of individual forecasted transactions and increases the variable price components eligible to be designated as the hedged risk in the forecasted purchase or sale of nonfinancial assets. For public business entities, the provisions of ASU 2025-09 are effective for fiscal years beginning after December 15, 2026. Early adoption is permitted. Management is currently evaluating the requirements under this new standard.
Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities (ASU "2025-10")
Note 4: Acquisitions
Note 5: Restructuring, Asset Impairments and Other, Net
Details of restructuring, asset impairments and other, net were as follows (in millions):
| Restructuring | Asset Impairments | Other | Total | ||||||||||||||||||||
For the quarter ended April 3, 2026: | |||||||||||||||||||||||
| 2026 Manufacturing Realignment Program | $ | $ | $ | $ | |||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| Restructuring | Asset Impairments | Other Charges | Total | ||||||||||||||||||||
For the quarter ended April 4, 2025: | |||||||||||||||||||||||
| 2025 Manufacturing Realignment Program | $ | $ | $ | $ | |||||||||||||||||||
| 2024 Business Realignment | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
A summary of changes in the accrued restructuring balance by program was as follows (in millions):
| As of | As of | ||||||||||||||||||||||
| December 31, 2025 | Charges | Usage | April 3, 2026 | ||||||||||||||||||||
| 2026 Manufacturing Realignment Program | $ | $ | $ | ( | $ | ||||||||||||||||||
| 2025 Manufacturing Realignment Program | ( | ||||||||||||||||||||||
| Other | ( | ||||||||||||||||||||||
| Total | $ | $ | $ | ( | $ | ||||||||||||||||||
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ON SEMICONDUCTOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(unaudited)
The amounts recorded under the 2026 Manufacturing Realignment Program represent new restructuring activities that expand upon the Company’s 2025 Manufacturing Realignment Program for actions and decisions taken in 2026.
2026 Manufacturing Realignment Program
During the first quarter of 2026, the Company continued to engage in additional restructuring and cost reduction initiatives under its previously disclosed multi‑year manufacturing realignment program to better align manufacturing capacity and capabilities with anticipated long‑term needs. These initiatives resulted in a reduction of global workforce, impairments of certain long-lived assets that met the held-for-sale criteria, and certain other charges primarily relating to the accelerated amortization and depreciation of assets for actions taken previously, during the quarter ended April 3, 2026.
Restructuring
Restructuring charges include estimated severance payments and related benefit expenses for employees who were notified of their employment termination or terminated during the period.
In January 2026, as part of the 2026 Manufacturing Realignment Program, the Company initiated a restructuring plan to further reduce its global workforce by approximately 650 employees, and, in connection with such plan, the Company expects to incur total severance and other related benefit expenses of approximately $24.0 million in 2026. Of this, approximately $20.2 million was recognized during the quarter ended April 3, 2026, with the remaining amount expected to be recognized during the remainder of 2026.
Of the aggregate expenses relating to these actions, the Company paid approximately $15.6 million to approximately 550 terminated employees and had approximately $4.6 million accrued as of April 3, 2026.
Asset Impairment
The Company recorded impairment charges of $147.0 million during the quarter ended April 3, 2026 related to previous investments in manufacturing equipment at certain manufacturing facilities pursuant to held-for-sale accounting guidance due to the assets no longer being needed to meet anticipated long-term customer demand. Of the $147.0 million of asset impairment charges, $82.0 million and $65.0 million were for assets held in South Korea and the Czech Republic, respectively. During the first quarter of 2026, it was determined that the assets identified by the Company met all criteria to be classified as assets held-for-sale with the expectation that these assets would be disposed of within 12 months from the end of the quarter. The impairment charges were determined as the difference between the carrying value of these long-lived assets and their estimated fair values, less estimated costs to sell such assets. Fair values were determined primarily by using unobservable inputs such as estimated sales prices based on available market prices, underlying equipment condition and market demand for similar equipment, inputs categorized as Level 3 within the fair value hierarchy. The Company utilized a third-party valuation specialist to assist in the determination of assets held-for-sale. Fair value was estimated primarily using market and income approaches, including third-party appraisals where available. Key unobservable inputs included expected sales proceeds, estimated equipment condition, and discount adjustments for certain specialized tooling.
Additional impairment charges for manufacturing equipment may be incurred in future periods pursuant to the timing of meeting the necessary criteria for being classified as held-for-sale.
Other
Other charges of $162.1 million for the quarter ended April 3, 2026 consisted primarily of accelerated depreciation of leasehold improvements and accelerated amortization of ROU assets that were abandoned in connection with the 2025 and 2026 Manufacturing Realignment Programs. Of the $162.1 million, $81.7 million and $54.8 million related to the accelerated depreciation and amortization of one lease each in the Czech Republic and the United States, respectively. The identified assets were fully depreciated and amortized as of April 3, 2026.
The Company continues to evaluate for potential operating improvements and efficiencies.
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ON SEMICONDUCTOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(unaudited)
Note 6: Balance Sheet Information and Other Supplemental Disclosures
Goodwill
Goodwill is tested for impairment annually on the first day of the fourth quarter or more frequently if events or changes in circumstances would more likely-than-not reduce the fair value of a reporting unit below its carrying value.
The following table summarizes goodwill by operating and reportable segments (in millions):
| PSG | AMG | ISG | Total | |||||||||||||||||||||||
Balances as of December 31, 2025 (1) | $ | $ | $ | $ | ||||||||||||||||||||||
Balances as of April 3, 2026 (1) | $ | $ | $ | $ | ||||||||||||||||||||||
Inventories
Details of inventories were as follows (in millions):
| As of | |||||||||||
| April 3, 2026 | December 31, 2025 | ||||||||||
| Inventories: | |||||||||||
| Raw materials | $ | $ | |||||||||
| Work in process | |||||||||||
| Finished goods | |||||||||||
| Total | $ | $ | |||||||||
Defined Benefit Plans
The Company recognizes the aggregate amount of all over-funded plans as assets and the aggregate amount of all underfunded plans as liabilities in its financial statements. As of April 3, 2026, the net assets for the over-funded plans totaled $29.9 million. The total accrued pension liability for underfunded plans was $56.5 million, of which the current portion of $0.5 million was classified as Accrued expenses and other current liabilities. As of December 31, 2025, the net funded status for all the plans was a liability of $26.4 million, of which the current portion of $1.5 million was classified as Accrued expenses and other current liabilities.
The components of the net periodic pension expense were as follows (in millions):
| Quarters Ended | |||||||||||
| April 3, 2026 | April 4, 2025 | ||||||||||
| Service cost | $ | $ | |||||||||
| Interest cost | |||||||||||
| Expected return on plan assets | ( | ( | |||||||||
| Curtailment losses | |||||||||||
| Total | $ | $ | |||||||||
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ON SEMICONDUCTOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(unaudited)
Leases
Operating lease arrangements are comprised primarily of real estate and equipment agreements. The components of lease expense (including accelerated amortization related to ROU asset abandonment discussed in Note 5) were as follows (in millions):
| Quarters Ended | |||||||||||
| April 3, 2026 | April 4, 2025 | ||||||||||
| Operating lease | $ | $ | |||||||||
| Variable lease | |||||||||||
| Short-term lease | |||||||||||
| Total | $ | $ | |||||||||
The operating lease liabilities and operating ROU assets recognized in the Consolidated Balance Sheets were as follows (in millions):
| As of | |||||||||||
| April 3, 2026 | December 31, 2025 | ||||||||||
| Operating lease liabilities included in: | |||||||||||
| $ | $ | ||||||||||
| Total | $ | $ | |||||||||
| Operating ROU assets included in: | |||||||||||
| $ | $ | ||||||||||
As of April 3, 2026, the weighted-average remaining lease terms were 11.1 years and 17.3 years, and the weighted-average discount rates were 5.0 % and 5.8 %, for operating leases and financing leases, respectively.
Supplemental Disclosure of Cash Flow Information
Certain of the cash and non-cash activities were as follows (in millions):
| Quarters Ended | |||||||||||
| April 3, 2026 | April 4, 2025 | ||||||||||
| Non-cash investing activities: | |||||||||||
| Capital expenditures in accounts payable and other long-term liabilities | $ | $ | |||||||||
| Operating ROU assets obtained in exchange for lease liabilities | |||||||||||
| Cash paid for: | |||||||||||
| Interest expense | $ | $ | |||||||||
| Income taxes | |||||||||||
| Operating lease payments in operating cash flows | |||||||||||
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ON SEMICONDUCTOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(unaudited)
The following table shows a reconciliation of the captions in the Consolidated Balance Sheets to the Consolidated Statements of Cash Flows (in millions):
| As of | |||||||||||||||||||||||
| April 3, 2026 | December 31, 2025 | April 4, 2025 | December 31, 2024 | ||||||||||||||||||||
| Consolidated Balance Sheets: | |||||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
| Restricted cash (included in other current assets) | |||||||||||||||||||||||
| Cash, cash equivalents and restricted cash in Consolidated Statements of Cash Flows | $ | $ | $ | $ | |||||||||||||||||||
Note 7: Long-Term Debt
Long-term debt consisted of the following (in millions, with annualized interest rates):
| As of | |||||||||||
| April 3, 2026 | December 31, 2025 | ||||||||||
| Revolving Credit Facility due 2028 | $ | $ | |||||||||
| Gross long-term debt | |||||||||||
Less: Unamortized debt discount (3) | ( | ( | |||||||||
Less: Unamortized debt issuance costs (4) | ( | ( | |||||||||
| Net long-term debt | $ | $ | |||||||||
(1)Interest is payable on March 1 and September 1 of each year at 0.50 % annually.
(2)Interest is payable on March 1 and September 1 of each year at 3.875 % annually.
(3)Unamortized debt discount of $2.2 million and $2.5 million for the 3.875
(4)Unamortized debt issuance costs of $15.4 million and $16.5 million for the 0.50 % Notes, $3.7 million and $4.5 million for the 0 0.7 million and $0.9 million for the 3.875
Expected maturities of gross long-term debt as of April 3, 2026 were as follows (in millions):
| Period | Expected Maturities | |||||||
| Remainder of 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| Total | $ | |||||||
The Company was in compliance with its covenants under all debt agreements as of April 3, 2026, and expects to remain in compliance with all covenants over at least the next 12 months.
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ON SEMICONDUCTOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(unaudited)
Note 8: Earnings Per Share and Equity
Earnings Per Share
Net income per share of common stock for calculating basic and diluted earnings per share was calculated as follows (in millions, except per share data):
| Quarters Ended | |||||||||||
| April 3, 2026 | April 4, 2025 | ||||||||||
| Net loss for diluted earnings per share of common stock | $ | ( | $ | ( | |||||||
| Basic weighted-average shares of common stock outstanding | |||||||||||
| Diluted weighted-average shares of common stock outstanding | |||||||||||
| Net loss per share of common stock attributable to ON Semiconductor Corporation: | |||||||||||
| Basic | $ | ( | $ | ( | |||||||
| Diluted | $ | ( | $ | ( | |||||||
Basic loss per share of common stock is computed by dividing net loss for basic earnings by the weighted-average number of shares of common stock outstanding during the period. To calculate the diluted weighted-average shares of common stock outstanding, the treasury stock method has been applied to calculate the number of incremental shares from the assumed issuance of shares relating to RSUs. The excluded number of anti-dilutive share-based awards was 2.6 million and 1.8 million for the quarters ended April 3, 2026 and April 4, 2025, respectively, as the inclusion would have the effect of decreasing the net loss per common share attributable to the Company.
The dilutive impacts related to the 0.50 0 0.50 % Notes and the 0 % Notes are repayable in cash up to the par value and in cash or shares of common stock for the excess over par value. Prior to conversion, the convertible note hedges are not considered for purposes of the earnings per share calculations as their effect would be anti-dilutive. Upon conversion, the convertible note hedges are expected to offset the dilutive effect of the 0.50 % Notes and 0 % Notes when the stock price is above $103.87 and $52.97 per share, respectively.
The dilutive impact of the warrants issued concurrently with the issuance of the 0.50 % Notes and 0 % Notes with exercise prices of $156.78 and $74.34 , respectively, has been included in the calculation of diluted weighted-average common shares outstanding, if applicable. The dilutive impact of the warrants has been excluded for the quarters ended April 3, 2026 and April 4, 2025, respectively, as the inclusion would have the effect of decreasing the net loss per common share attributable to the Company.
Equity
Share Repurchase Program
In February 2023, the Board of Directors approved a share repurchase program (the “Share Repurchase Program”) under which the Company could repurchase up to an aggregate of $3.0 billion (exclusive of fees, commissions and other expenses) of the Company's common stock through December 31, 2025. In November 2025, the Board of Directors approved a new Share Repurchase Program (the "New Share Repurchase Program") under which the Company may repurchase up to an aggregate of $6.0 billion (exclusive of fees, commissions and other expenses) of the Company's common stock through December 31, 2028.
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ON SEMICONDUCTOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(unaudited)
Activity under the New Share Repurchase Program and the Share Repurchase Program during the quarters ended April 3, 2026 and April 4, 2025, respectively, was as follows (in millions, except per share data):
| Quarters Ended | |||||||||||
| April 3, 2026 | April 4, 2025 | ||||||||||
Number of repurchased shares (1) | |||||||||||
| Aggregate purchase price | $ | $ | |||||||||
| Fees, commissions and excise tax | |||||||||||
| Total | $ | $ | |||||||||
Weighted-average purchase price per share (2) | $ | $ | |||||||||
(1) None of these shares had been reissued or retired as of April 3, 2026, but may be reissued later.
(2) Exclusive of fees, commissions or other expenses.
As of April 3, 2026, the authorized amount remaining under the New Share Repurchase Program was approximately $5.7 billion.
Shares for Restricted Stock Units Tax Withholding
The amounts remitted for employee withholding taxes during the quarters ended April 3, 2026 and April 4, 2025 were $27.4 million and $22.9 million, respectively, for which the Company withheld 0.4 million and 0.5 million shares of common stock, respectively, that were underlying the RSUs that vested. This tax withholding activity is separate from the Share Repurchase Program or the New Share Repurchase Program.
Non-Controlling Interest in Leshan-Phoenix Semiconductor Company Limited ("Leshan")
Note 9: Share-Based Compensation
Total share-based compensation expense related to the RSUs, stock grant awards and the ESPP was recorded within the Consolidated Statements of Operations and Comprehensive Income as follows (in millions):
| Quarters Ended | |||||||||||
| April 3, 2026 | April 4, 2025 | ||||||||||
| Cost of revenue | $ | $ | |||||||||
| Research and development | |||||||||||
| Selling and marketing | |||||||||||
| General and administrative | |||||||||||
| Share-based compensation expense | |||||||||||
| Income tax benefit | ( | ( | |||||||||
| Share-based compensation expense, net of tax | $ | $ | |||||||||
As of April 3, 2026, the total unrecognized expected share-based compensation expense, net of estimated forfeitures, related to non-vested RSUs with service, performance and market conditions was $167.5 million, which is expected to be recognized over a weighted-average period of 1.9 years. Upon vesting of RSUs or stock grant awards or completion of a purchase under the ESPP, new shares of common stock are issued. The annualized pre-vesting forfeiture rate for RSUs was estimated to be 8
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ON SEMICONDUCTOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(unaudited)
Shares Available
As of April 3, 2026 and December 31, 2025, there was an aggregate of 27.7 million and 28.5 million shares of common stock, respectively, available for grant under the Amended and Restated SIP.
Restricted Stock Units
RSUs generally vest ratably over three years for awards with service conditions and over or five years for awards with performance, service and market conditions, or a combination thereof, and are settled in shares of common stock upon vesting. A summary of the RSU transactions for the quarter ended April 3, 2026 was as follows (in millions, except per share data):
| Number of Shares | Weighted-Average Grant Date Fair Value Per Share | ||||||||||
Non-vested RSUs at December 31, 2025 | $ | ||||||||||
| Granted | |||||||||||
| Achieved | |||||||||||
| Released | ( | ||||||||||
| Forfeited | ( | ||||||||||
Non-vested RSUs at April 3, 2026 | |||||||||||
Note 10: Commitments and Contingencies
Environmental Contingencies
The Company has encountered and dealt with a number of environmental issues over time relating to the various locations where it conducts its operations and has incurred certain costs related to clean-up activities and environmental remediation efforts. In certain instances, the Company has been indemnified for such costs, often from third parties who were the prior owners of such facilities. Any costs to the Company in connection with such environmental matters have generally not been, and based on the information available, are not expected to be material.
Financing Contingencies
In the ordinary course of business, the Company provides standby letters of credit or other guarantee instruments to certain parties initiated by either the Company or its subsidiaries, as required for transactions, including, but not limited to, material purchase commitments, agreements to mitigate collection risk, leases, utilities arrangements and/or customs guarantees. The Revolving Credit Facility includes $25.0 million available for the issuance of letters of credit, of which $1.6 million was outstanding as of April 3, 2026, which reduced the borrowing capacity under such facility. As of April 3, 2026, the Company also had outstanding guarantees and letters of credit outside of its Revolving Credit Facility totaling $7.1 million.
As part of obtaining financing in the ordinary course of business, the Company issued guarantees related to certain of its subsidiaries, which totaled $1.6 million as of April 3, 2026. Based on historical experience and information currently available, the Company believes that it will not be required to make payments under the standby letters of credit or guarantee arrangements for the foreseeable future.
Indemnification Contingencies
The Company is a party to a variety of agreements entered into in the ordinary course of business, including acquisition agreements, pursuant to which it may be obligated to indemnify the other parties for certain liabilities that arise out of or relate to the subject matter of the agreements. Some of the agreements entered into by the Company require it to indemnify the other party against losses due to IP infringement, property damage (including environmental contamination), personal injury, failure to comply with applicable laws, the Company’s negligence or willful misconduct or breach of representations and warranties and covenants related to such matters as title to sold assets. In the case of certain acquisition agreements, these agreements may require us to maintain such indemnification provisions for the acquiree’s directors, officers and other employees and agents, in certain cases for a number of years following the acquisition.
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ON SEMICONDUCTOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(unaudited)
While the Company’s future obligations under certain agreements may contain limitations on liability for indemnification, other agreements do not contain such limitations and under such agreements it is not possible to predict the maximum potential amount of future payments due to the conditional nature of the Company’s obligations and the unique facts and circumstances involved in each particular agreement. Historically, payments made by the Company under any of these indemnities have not had a material effect on the Company’s business, financial condition, results of operations or cash flows. Additionally, the Company does not believe that any amounts that it may be required to pay under these indemnities in the future will be material to the Company’s business, financial position, results of operations, or cash flows.
Legal Matters
The Company is currently involved in a variety of legal matters that arise in the ordinary course of business. Based on information currently available, the Company is not involved in any pending or threatened legal proceedings that it believes could reasonably be expected to have a material adverse effect on its financial condition, results of operations or liquidity. However, the litigation process is inherently uncertain, and the Company cannot guarantee that the outcome of any litigation matter will be favorable to the Company.
Securities Class Action And Derivative Litigation Concerning the Company's SiC Business
On December 13, 2023, a putative class action captioned Hubacek v. On Semiconductor Corp., et al., Case No. 1:23-cv-01429 (D. Del.), was filed by an alleged stockholder of the Company in the U.S. District Court for the District of Delaware against the Company and certain of its officers. This action was transferred to the U.S. District Court for the District of Arizona in March of 2024. The initial complaint asserted claims for alleged violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The initial complaint alleged that the defendants made misleading statements regarding the Company's SiC business. An amended complaint was filed on May 31, 2024. The amended complaint again asserts claims for alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The plaintiff seeks a ruling that this case may proceed as a class action, and seeks damages, attorneys’ fees and costs. The Company filed a motion to dismiss the amended complaint on July 30, 2024. Upon reviewing the Company’s motion to dismiss the amended complaint, plaintiff deemed it necessary to further amend their complaint. On September 6, 2024, the plaintiff filed their second amended complaint. The Company filed a motion to dismiss this second amended complaint on October 10, 2024. Full briefing for this motion to dismiss the second amended complaint was completed on December 20, 2024. Oral arguments for this motion to dismiss were heard by the court on June 27, 2025. On July 11, 2025, the court granted the Company's motion to dismiss the plaintiff's second amended complaint without prejudice. On August 11, 2025, the plaintiff filed their third amended complaint. The Company filed a motion to dismiss this third amended complaint on September 25, 2025. Full briefing on this motion to dismiss the third amended complaint was completed on December 10, 2025. The Company believes that it has strong legal defenses to the claims asserted and will vigorously defend itself.
On January 3, 2024, a purported stockholder derivative action captioned Silva v. El-Khoury, et al., Case No. 1:24-cv-00007 (D. Del.), was filed by a purported stockholder of the Company in the U.S. District Court for the District of Delaware. On February 12, 2024, a purported stockholder derivative action captioned Smalley et al. v. El-Khoury et al. Case No. 1:24-cv-00183 (D. Del.), was filed by a purported stockholder of the Company in the U.S. District Court for the District of Delaware. Both aforementioned derivative actions, Silva and Smalley, were voluntarily dismissed without prejudice on April 15, 2024. On February 28, 2024, a purported stockholder derivative action captioned Mumme et al. v. El-Khoury et al. Case No. CV2024-003974 (D. AZ.), was filed by a purported stockholder of the Company in the Superior Court of the State of Arizona in and for the County of Maricopa. On March 15, 2024, a purported stockholder derivative action captioned Chan et al. v. Abe et al. Case No. 2:24-cv-00552 (D. AZ.), was filed by a purported stockholder of the Company in the U.S. District Court for the District of Arizona. On June 16, 2025, a purported stockholder derivative action captioned Balsam-Respler et al. v. El-Khoury et al. Case No. 2:25-cv-001672 (D. AZ.), was filed by a purported stockholder of the Company in the U.S. District Court for the District of Arizona. On September 23, 2025, the U.S. District Court for the District of Arizona consolidated the Balsam-Respler and Chan derivative complaints into a consolidated action entitled In re ON Semiconductor Corporation Stockholder Derivative Litigation, Case No. CV-24-00552 (D.AZ.). The allegations in these derivative complaints are substantially similar to the allegations in the securities class action complaint discussed above. The derivative suits purport to assert claims (1) on behalf of the Company against certain of its officers for contribution under the federal securities laws and (2) against all of the defendants for breach of fiduciary duty, aiding and abetting, unjust enrichment, abuse of control, gross mismanagement, and waste. The plaintiffs seek an award of damages, pre-judgment interest, punitive damages, attorneys’ fees, and other costs and expenses related to the litigation. The Company believes that the plaintiffs lack standing to assert claims on the Company’s behalf. These pending derivative actions were stayed by agreement, pending the resolution of Hubacek v. On Semiconductor Corp.
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ON SEMICONDUCTOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(unaudited)
Intellectual Property Matters
The Company faces risk of exposure from claims of infringement of the IP rights of others. In the ordinary course of business, the Company receives letters asserting that the Company’s products or components breach another party’s rights. Such letters may request royalty payments from the Company, that the Company cease and desist using certain IP, and/or request other remedies.
Note 11: Fair Value Measurements
Fair Value of Financial Instruments
The following tier level hierarchy is used to determine fair values of the financial instruments:
•Level 1: based on observable inputs that reflect quoted prices for identical assets or liabilities in active markets.
•Level 2: based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly.
•Level 3: based on the use of unobservable inputs for the assets and liabilities and other types of analyses.
The carrying values of cash and cash equivalents, which include money market funds and demand and time deposits, approximate fair value because of the short-term maturity of these instruments. Money market funds and demand deposits are classified as Level 1 while time deposits are classified as Level 2 within the fair value hierarchy. The carrying amounts of other current assets, excluding assets held-for-sale, and liabilities, such as accounts receivable and accounts payable, approximate fair value due to the short-term maturity of the amounts, and such amounts are considered Level 2 in the fair value hierarchy.
The Company held $400.0
In connection with the Vcore acquisition in 2025, the Company is required to pay additional cash consideration upon the achievement of specified products and the achievement of certain revenue milestones. The maximum contingent cash consideration to be distributed is $144.0 million. Contingent consideration is classified as Level 3 within the fair value hierarchy. Key unobservable inputs included the probability of completing future product milestones, the probability of achieving revenue targets, the expected timing of payments, volatility and risk‑adjusted discount rates. The contingent liability for revenue milestones was valued using Monte Carlo simulations.
The contingent consideration, which will be settled in cash, has been allocated between accrued expenses and other long-term liabilities based on the expected timing of payments. Accordingly, it will be remeasured at fair value each reporting period, with changes recognized in the Consolidated Statements of Operations. The fair value of the contingent consideration was as follows (in millions):
| As of | |||||||||||
| April 3, 2026 | December 31, 2025 | ||||||||||
| Contingent consideration included in: | |||||||||||
| Accrued expenses and other current liabilities | $ | $ | |||||||||
| Other long-term liabilities | |||||||||||
| Total | $ | $ | |||||||||
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ON SEMICONDUCTOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(unaudited)
Fair Value of Long-Term Debt, including Current Portion
The carrying amounts and fair values of the Company's long-term borrowings were as follows (in millions):
| As of | |||||||||||||||||||||||
| April 3, 2026 | December 31, 2025 | ||||||||||||||||||||||
| Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||||||||||
Long-term debt, including current portion (1) | |||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
(1) Carrying amounts shown are net of unamortized debt discount, if applicable, and unamortized debt issuance costs.
Fair values of the 0 % Notes, 0.50 % Notes and 3.875 % Notes were estimated based on market prices in active markets (Level 1).
Note 12: Financial Instruments
Foreign Currencies
The following summarizes the notional amounts and related fair values of the Company’s foreign currency derivative instruments in U.S. Dollars (in millions):
| Notional or contractual amount | Fair Value of | |||||||||||||||||||
Assets (1) | Liabilities (2) | |||||||||||||||||||
| As of April 3, 2026 | ||||||||||||||||||||
| Derivative instruments with hedge accounting designation: | ||||||||||||||||||||
| Cash flow hedges | $ | $ | $ | |||||||||||||||||
| Derivative instruments without hedge accounting designation: | ||||||||||||||||||||
| Currency derivatives | ||||||||||||||||||||
| $ | $ | |||||||||||||||||||
| As of December 31, 2025 | ||||||||||||||||||||
| Derivative instruments with hedge accounting designation: | ||||||||||||||||||||
| Cash flow hedges | $ | $ | $ | |||||||||||||||||
| Derivative instruments without hedge accounting designation: | ||||||||||||||||||||
| Currency derivatives | ||||||||||||||||||||
| $ | $ | |||||||||||||||||||
(1)Included in Other current assets.
(2)Included in Accrued expenses and other current liabilities.
Cash flow hedges and currency derivatives are measured at fair value using a discounted cash flow model based on observable forward exchange rates and credit‑adjusted discount rates, and are classified as Level 2 fair value measurements. Gains and losses on cash flow hedges and currency derivatives were immaterial
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ON SEMICONDUCTOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(unaudited)
Derivative Instruments with Hedge Accounting Designation
Cash Flow Hedges
The Company maintains a foreign currency cash flow hedging program to reduce the risk that its U.S. dollar net cash outflows from procurement activities will be adversely affected by fluctuations in foreign currency exchange rates. The Company enters into forward contracts (principally Philippine peso, Korean won and Czech koruna) to hedge certain portions of forecasted cash flows denominated in foreign currencies. These contracts generally mature within 18 months and are designated as cash flow hedges for accounting purposes. The Company did not identify any ineffectiveness with respect to the notional amounts of the foreign currency forward contracts effective as of April 3, 2026.
Derivative Instruments without Hedge Accounting Designation
Currency Derivatives
As of April 3, 2026 and December 31, 2025, the Company had net outstanding foreign exchange contracts that hedged existing assets and liabilities associated with transactions on its balance sheet, which were undesignated hedges for accounting purposes. Such contracts were obtained through financial institutions and were scheduled to mature within two months from the time of purchase. Management believes that these financial instruments should not subject the Company to increased risks from foreign exchange movements because gains and losses on these contracts should offset losses and gains on the underlying assets, liabilities and transactions to which they are related.
Convertible Note Hedges
The Company entered into convertible note hedges in connection with the issuance of the 0 % Notes and 0.50 % Notes. See Note 7: ''Long-Term Debt'' for more information.
Other
As of April 3, 2026, the Company had no outstanding commodity derivatives, currency swaps, options or equity contracts held at subsidiaries or affiliated companies. The Company does not hedge the value of its equity investments in its subsidiaries or affiliated companies.
The Company is exposed to credit-related losses if its hedge counterparties fail to perform their obligations. As of April 3, 2026, the counterparties to the Company's hedge contracts were held at financial institutions which the Company believes to be highly rated, and no credit-related losses are anticipated.
Note 13: Income Taxes
The Company recognizes interest and penalties accrued related to uncertain tax positions in tax expense in the Consolidated Statements of Operations and Comprehensive Income. The Company maintains a partial valuation allowance on its U.S. state deferred tax assets and a valuation allowance on foreign net operating losses and tax credits that primarily expire in 2025.
The Company is currently under IRS examination for the 2022 and 2023 tax years. Tax years prior to 2022 are generally not subject to examination by the IRS. For state tax returns, the Company is generally not subject to income tax examinations for tax years prior to 2020. With respect to jurisdictions outside the United States, the Company is generally not subject to examination for tax years prior to 2015.
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ON SEMICONDUCTOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(unaudited)
Note 14: Changes in Accumulated Other Comprehensive Loss
Amounts comprising accumulated other comprehensive loss and reclassifications were as follows (in millions):
| Currency Translation Adjustments | Effects of Cash Flow Hedges | Total | ||||||||||||||||||
| Balance as of December 31, 2025 | $ | ( | $ | $ | ( | |||||||||||||||
| Other comprehensive loss prior to reclassifications | ( | ( | ( | |||||||||||||||||
| Amounts reclassified from accumulated other comprehensive loss | ( | ( | ||||||||||||||||||
Net current period other comprehensive loss (1) | ( | ( | ( | |||||||||||||||||
| Balance as of April 3, 2026 | $ | ( | $ | ( | $ | ( | ||||||||||||||
(1) Effects of cash flow hedges were net of tax impact of $2.1 million for the quarter ended April 3, 2026.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion in conjunction with our audited historical consolidated financial statements, which are included in the 2025 Form 10-K, and our unaudited consolidated financial statements for the fiscal quarter ended April 3, 2026, which are included elsewhere in this Form 10-Q. This Management's Discussion and Analysis of Financial Condition and Results of Operations contains statements that are forward-looking. These statements are based on expectations and assumptions as of the date of this Form 10-Q and are subject to risks, uncertainties and other factors. Actual results could differ materially because of the factors discussed below or elsewhere in this Form 10-Q. See Part II, Item 1A. "Risk Factors" of this Form 10-Q and Part I, Item 1A. "Risk Factors" of the 2025 Form 10-K.
Executive Overview
onsemi Overview
ON Semiconductor Corporation ("onsemi," "we," "us," "our," or the "Company"), with its wholly and majority-owned subsidiaries, operates under the onsemiTM brand. The Company is organized into three operating and reportable segments: the Power Solutions Group ("PSG"), the Analog and Mixed-Signal Group ("AMG"), and the Intelligent Sensing Group ("ISG").
We offer intelligent power and intelligent sensing solutions that drive electrification, energy efficiency, safety, and automation in automotive, industrial, and other end‑markets, including AI data center. Our intelligent power technologies enable electrified drivetrain and power management applications in the automotive industry and support efficient fast‑charging systems. Our intelligent sensing technologies enable advanced safety applications in automotive through industry‑leading performance and reliability.
We believe the evolution of the automotive industry, with advancements in autonomous driving, ADAS, vehicle electrification, and increased electronics content across vehicle platforms, is reshaping the boundaries of transportation. Through sensing integration, we believe our intelligent power solutions achieve increased efficiencies compared to our peers. This integration allows lower temperature operation and reduced cooling requirements while saving costs and minimizing weight. In addition, our power solutions deliver power with less die per module, improving performance efficiency for a given battery or power capacity.
In the industrial market, our intelligent power technologies propel sustainable energy for the highest efficiency solar strings and industrial power. In the medical field, our intelligent power technologies extend the life of personal diagnostic devices, such as continuous glucose monitors. Our intelligent sensing technologies support the next generation industry through automation, allowing for smarter factories and buildings. Our intelligent power and sensing technologies are enabling robotics and humanoids.
In our other end-market, which includes AI data center products, our intelligent power technologies enable energy efficiency in a market in which energy needs are growing at an exponential rate, and AI data center operators are focused on reducing energy consumption. We believe we have one of the most comprehensive portfolios of products and technologies for this market to address the complete power tree, and we are well-positioned to benefit as next-generation AI data center processors and racks enter the market.
Business Strategy Developments
We are focused on increasing profitable revenue through differentiated technologies to address the high-growth megatrends in automotive, industrial and other markets which include AI data centers. We continue to optimize and right-size our manufacturing footprint to align our capacity with our long-term outlook, while focusing on generating efficiencies that result in meaningful gross margin expansion and operating cash flows. We intend to achieve efficiencies in our operating and capital expenditures and invest in research and development initiatives to accelerate growth in high-margin products.
2026 Manufacturing Realignment Program
During the first quarter of 2026, the Company continued to engage in additional restructuring and cost reduction initiatives under its previously disclosed multi‑year manufacturing realignment program to better align manufacturing capacity and capabilities with anticipated long-term needs.
We expect to incur total severance costs and related benefit expenses of $24.0 million related to the termination of approximately 650 employees. Of this, approximately $20.2 million was recognized during the quarter ended April 3, 2026.
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Additionally, we recorded non-cash impairment charges of $147.0 million during the quarter ended April 3, 2026 related to previous investments in manufacturing equipment at certain manufacturing facilities pursuant to held-for-sale accounting guidance. Other charges of $162.1 million for the quarter ended April 3, 2026 consisted primarily of accelerated depreciation of leasehold improvements and accelerated amortization of ROU assets that were abandoned in connection with the 2025 and 2026 Manufacturing Realignment Programs. The total of the aforementioned costs was included within Restructuring, Asset Impairments and Other, Net in the Consolidated Statement of Operations.
For additional information, see Note 5: ''Restructuring, Asset Impairments and Other, Net'' in the notes to our unaudited consolidated financial statements included elsewhere in this Form 10-Q.
Share Repurchases
During the quarter ended April 3, 2026, we repurchased approximately 5.7 million shares of common stock for an aggregate purchase price of $348.6 million. For additional information, see Note 8: ''Earnings Per Share and Equity'' in the notes to our unaudited consolidated financial statements included elsewhere in this Form 10-Q.
Results of Operations
Quarter Ended April 3, 2026 compared to the Quarter Ended April 4, 2025
The following table summarizes certain information relating to our operating results that has been derived from our unaudited consolidated financial statements (in millions):
| Quarters Ended | |||||||||||||||||
| April 3, 2026 | April 4, 2025 | Dollar Change | |||||||||||||||
| Revenue | $ | 1,513.3 | $ | 1,445.7 | $ | 67.6 | |||||||||||
| Cost of revenue | 930.2 | 1,151.9 | (221.7) | ||||||||||||||
| Gross profit | 583.1 | 293.8 | 289.3 | ||||||||||||||
| Operating expenses: | |||||||||||||||||
| Research and development | 144.3 | 164.1 | (19.8) | ||||||||||||||
| Selling and marketing | 63.0 | 68.3 | (5.3) | ||||||||||||||
| General and administrative | 89.4 | 84.4 | 5.0 | ||||||||||||||
| Amortization of intangible assets | 10.5 | 11.4 | (0.9) | ||||||||||||||
| Restructuring, asset impairments and other, net | 329.3 | 539.3 | (210.0) | ||||||||||||||
| Total operating expenses | 636.5 | 867.5 | (231.0) | ||||||||||||||
| Operating loss | (53.4) | (573.7) | 520.3 | ||||||||||||||
| Other income (expense), net: | |||||||||||||||||
| Interest expense | (12.7) | (18.0) | 5.3 | ||||||||||||||
| Interest income | 17.7 | 26.6 | (8.9) | ||||||||||||||
| Other income | 3.8 | 4.1 | (0.3) | ||||||||||||||
| Other income (expense), net | 8.8 | 12.7 | (3.9) | ||||||||||||||
| Loss before income taxes | (44.6) | (561.0) | 516.4 | ||||||||||||||
| Income tax benefit | 11.7 | 75.8 | (64.1) | ||||||||||||||
| Net loss | (32.9) | (485.2) | 452.3 | ||||||||||||||
| Less: Net income attributable to non-controlling interest | (0.5) | (0.9) | 0.4 | ||||||||||||||
| Net loss attributable to ON Semiconductor Corporation | $ | (33.4) | $ | (486.1) | $ | 452.7 | |||||||||||
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The following table summarizes certain information relating to our segment results (in millions):
| Quarter Ended April 3, 2026 | As a % of Total | Quarter Ended April 4, 2025 | As a % of Total | Dollar Change | |||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||
| PSG | $ | 736.6 | 48.7 | % | $ | 645.1 | 44.6 | % | $ | 91.5 | |||||||||||||||||||
| AMG | 540.4 | 35.7 | % | 566.4 | 39.2 | % | (26.0) | ||||||||||||||||||||||
| ISG | 236.3 | 15.6 | % | 234.2 | 16.2 | % | 2.1 | ||||||||||||||||||||||
| Total | $ | 1,513.3 | 100.0 | % | $ | 1,445.7 | 100.0 | % | $ | 67.6 | |||||||||||||||||||
| Cost of revenue: | |||||||||||||||||||||||||||||
| PSG | $ | 536.2 | 57.6 | % | $ | 521.9 | 45.3 | % | $ | 14.3 | |||||||||||||||||||
| AMG | 250.8 | 27.0 | % | 265.5 | 23.1 | % | (14.7) | ||||||||||||||||||||||
| ISG | 143.2 | 15.4 | % | 364.5 | 31.6 | % | (221.3) | ||||||||||||||||||||||
| Total | $ | 930.2 | 100.0 | % | $ | 1,151.9 | 100.0 | % | $ | (221.7) | |||||||||||||||||||
Gross profit: (1) | |||||||||||||||||||||||||||||
| PSG | $ | 200.4 | 27.2 | % | $ | 123.2 | 19.1 | % | $ | 77.2 | |||||||||||||||||||
| AMG | 289.6 | 53.6 | % | 300.9 | 53.1 | % | (11.3) | ||||||||||||||||||||||
| ISG | 93.1 | 39.4 | % | (130.3) | (55.6) | % | 223.4 | ||||||||||||||||||||||
| Total | $ | 583.1 | 38.5 | % | $ | 293.8 | 20.3 | % | $ | 289.3 | |||||||||||||||||||
(1) Gross profit margin as a percentage of respective segment revenue balances.
Revenue
Revenue was $1,513.3 million and $1,445.7 million for the quarters ended April 3, 2026 and April 4, 2025, respectively, representing an increase of $67.6 million, or approximately 5%, year over year due to increased demand across all end-markets. We had one customer, a distributor, whose revenue accounted for approximately 12% and 10% of our total revenue for the quarters ended April 3, 2026 and April 4, 2025, respectively, across all reportable segments.
Revenue from PSG
Revenue from PSG increased by $91.5 million, or approximately 14%, for the quarter ended April 3, 2026 compared to the quarter ended April 4, 2025 due to increased demand. This was driven by an increase in revenue of $53.1 million, $31.0 million, and $7.4 million in the automotive, other, and industrial end-markets, respectively.
Revenue from AMG
Revenue from AMG decreased by $26.0 million, or approximately 5%, for the quarter ended April 3, 2026 compared to the quarter ended April 4, 2025 attributable to lower demand in certain end-markets. This was driven by a decrease in revenue of $16.3 million and $14.7 million in the automotive and other end-markets, respectively, which was partially offset by an increase of $5.0 million within the industrial end-market.
Revenue from ISG
Revenue from ISG increased by $2.1 million, or approximately 1%, for the quarter ended April 3, 2026 compared to the quarter ended April 4, 2025 due to increased demand. This was driven by an increase in revenue of $4.6 million in the industrial end-market, which was partially offset by a decrease in revenue of $1.4 million and $1.1 million in the automotive and other end-markets.
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Revenue by Geographic Location
Revenue by geographic location, based on sales billed from the respective country or region, was as follows (dollars in millions):
| Quarter Ended April 3, 2026 | As a % of Total Revenue (1) | Quarter Ended April 4, 2025 | As a % of Total Revenue (1) | ||||||||||||||||||||
| United Kingdom | $ | 392.2 | 25.9 | % | $ | 367.5 | 25.4 | % | |||||||||||||||
| Hong Kong | 368.9 | 24.4 | % | 370.1 | 25.6 | % | |||||||||||||||||
| Singapore | 322.2 | 21.3 | % | 273.8 | 18.9 | % | |||||||||||||||||
| United States | 296.5 | 19.6 | % | 292.6 | 20.2 | % | |||||||||||||||||
| Other | 133.5 | 8.8 | % | 141.7 | 9.8 | % | |||||||||||||||||
| Total revenue | $ | 1,513.3 | $ | 1,445.7 | |||||||||||||||||||
(1) Certain amounts may not total due to rounding of individual amounts.
Gross Profit and Gross Margin
Gross profit increased by $289.3 million, or approximately 98%, to $583.1 million for the quarter ended April 3, 2026 compared to $293.8 million for the quarter ended April 4, 2025 primarily due to the absence of $237.7 million of excess and obsolete inventory charges and a $43.9 million write‑off of consumables and manufacturing supplies recognized during the quarter ended April 4, 2025, which did not reoccur in 2026.
Our gross margin increased by 18.2 percentage points from 20.3% for the quarter ended April 4, 2025 to 38.5% for the quarter ended April 3, 2026. The increase was primarily driven by the absence of prior‑year excess and obsolete inventory charges and consumables write-off, slightly improved manufacturing utilization and favorable mix within certain business segments, partially offset by lower volumes in select end‑markets.
PSG gross profit increased by $77.2 million, primarily driven by higher revenue across all end‑markets and improved absorption resulting from higher manufacturing utilization. PSG gross margin increased by 8.1 percentage points to 27.2% from 19.1%, primarily due to the absence of a $43.9 million write‑off of consumables and manufacturing supplies charges during the quarter ended April 4, 2025, as well as improved utilization and operating leverage on higher volumes during the quarter ended April 3, 2026.
AMG gross profit decreased by $11.3 million, primarily driven by the decline in demand within the automotive and other end-markets. AMG gross margin increased by 0.5 percentage points to 53.6% from 53.1%, primarily due to product mix, including a higher proportion of higher‑margin offerings, which partially offset the impact of lower overall volume.
ISG gross profit increased by $223.4 million and gross margin increased to 39.4% from (55.6)%, primarily due to the absence of $232.2 million of excess and obsolete inventory charges recognized during the quarter ended April 4, 2025, which did not reoccur during the quarter ended April 3, 2026.
Operating Expenses
Research and development expenses were $144.3 million for the quarter ended April 3, 2026, as compared to $164.1 million for the quarter ended April 4, 2025, representing a decrease of $19.8 million, or approximately 12%. The decrease was primarily attributable to a decrease in production material costs and other variable expenses.
Selling and marketing expenses were $63.0 million for the quarter ended April 3, 2026, as compared to $68.3 million for the quarter ended April 4, 2025, representing a decrease of $5.3 million, or approximately 8%. The decrease was primarily attributable to lower payroll‑related expenses and reduced commission costs.
General and administrative expenses were $89.4 million for the quarter ended April 3, 2026, as compared to $84.4 million for the quarter ended April 4, 2025, representing an increase of $5.0 million, or approximately 6%. The increase was primarily attributable to higher payroll‑related expenses, including increased investments in corporate and operational support functions.
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Other Operating Expenses
Amortization of Intangible Assets
Amortization of intangible assets was $10.5 million for the quarter ended April 3, 2026, as compared to $11.4 million for the quarter ended April 4, 2025, representing a decrease of $0.9 million, or approximately 8%.
Restructuring, Asset Impairments and Other, Net
Restructuring, asset impairments and other, net was $329.3 million for the quarter ended April 3, 2026, as compared to $539.3 million for the quarter ended April 4, 2025. Charges incurred for the quarter ended April 3, 2026 relate to restructuring actions during the period. See Note 5: ''Restructuring, Asset Impairments and Other, Net'' in the notes to our unaudited consolidated financial statements included elsewhere in this Form 10-Q for additional information.
Interest Expense
Interest expense decreased by $5.3 million to $12.7 million during the quarter ended April 3, 2026, as compared to $18.0 million during the quarter ended April 4, 2025, due to the repayment of the Revolving Credit Facility on December 31, 2025. Our average gross long-term debt for the quarter ended April 3, 2026 was $3,004.9 million at a weighted-average interest rate of 1.7%, as compared to $3,379.9 million at a weighted-average interest rate of 2.1% for the quarter ended April 4, 2025.
Interest Income
Interest income decreased by $8.9 million, or approximately 33%, to $17.7 million during the quarter ended April 3, 2026 compared to $26.6 million during the quarter ended April 4, 2025. The decrease was primarily attributable to lower interest rates earned on cash equivalents and short‑term investments, as well as lower average cash and investment balances during the period.
Other Income (Expense)
During the quarter ended April 3, 2026, other income was $3.8 million compared to other expense of $4.1 million during the quarter ended April 4, 2025.
Income Tax Benefit
We recorded an income tax benefit of $11.7 million and $75.8 million for the quarters ended April 3, 2026 and April 4, 2025, respectively, representing effective tax rates of 26.2% and 13.5%, respectively. The higher effective tax rate in 2026 was due to the impact of discrete benefits recognized during the quarter.
For additional information, see Note 13: ''Income Taxes'' in the notes to the unaudited consolidated financial statements included elsewhere in this Form 10-Q.
Liquidity and Capital Resources
Overview
Our principal sources of liquidity are cash on hand, short-term investments, cash generated from operations, available borrowings under our Revolving Credit Facility as well as new debt and/or equity issuances. In the near term, we expect to fund our cash requirements by utilizing any or a combination of these principal sources. Our cash and cash equivalents and short-term investments were approximately $2.4 billion as of April 3, 2026, and the Revolving Credit Facility has approximately $1.5 billion available for future borrowings.
We require cash to: (i) fund our operating expenses, working capital requirements, outlays for strategic acquisitions and investments; (ii) service our debt, including principal and interest; (iii) incur capital expenditures; and (iv) repurchase our common stock. During the ordinary course of business, we evaluate our cash requirements and, if necessary, adjust our expenditures to reflect the current market conditions and our projected sales and demand. Future capital expenditures may be impacted by events and transactions that are not currently forecasted.
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We believe that our cash on hand, cash generated from our operations and the amounts available under the Revolving Credit Facility are adequate to meet our working capital requirements and other business needs for at least the next 12 months and thereafter for the foreseeable future.
Operating Activities
Our cash flows from operating activities were $239.1 million and $602.3 million for the quarters ended April 3, 2026 and April 4, 2025, respectively. The decrease in operating cash flows by $363.2 millions was primarily driven by unfavorable changes in working capital, including the timing of cash receipts and payments.
Net loss for the quarter ended April 3, 2026 improved compared to the prior‑year period, primarily due to lower non‑cash asset impairment and restructuring‑related charges, partially offset by accelerated depreciation and amortization expense for ROU assets and related improvements that were abandoned in connection with the 2025 and 2026 Manufacturing Realignment Programs. However, these improvements in earnings did not directly translate to higher operating cash flows, as working capital requirements had a more significant impact on cash generation during the period.
Our ability to generate positive operating cash flows depends on, among other factors, the achievement of revenue targets, management of manufacturing and operating costs and effective management of working capital. The timing of collections from customers, payments to suppliers and inventory management also significantly influences our operating cash flows.
Investing Activities
Our cash flows used in investing activities were $16.7 million and $214.9 million for the quarters ended April 3, 2026 and April 4, 2025, respectively. The decrease of $198.2 million was primarily attributable to a decrease in capital expenditures and a decrease in the payments for acquisition of a business during the quarter ended April 3, 2026. Our capital expenditures as a percentage of revenue were approximately 1%, and we expect capital expenditures of approximately 5% of revenue for the year ended December 31, 2026.
Financing Activities
Our cash flows used in financing activities were $366.0 million and $317.6 million for the quarters ended April 3, 2026 and April 4, 2025, respectively. The increase of $48.4 million was primarily attributable to increased share repurchases during the quarter ended April 3, 2026.
Our 0% Notes will mature on May 1, 2027 unless earlier repurchased or redeemed by the Company or converted pursuant to their terms. We expect to continue our New Share Repurchase Program subject to market conditions, the price of our shares and other factors (including liquidity needs). However, the New Share Repurchase Program may be modified, suspended or terminated by the Board of Directors at any time without prior notice.
Key Factors Potentially Affecting Liquidity
We believe that the key factors that could adversely affect our internal and external sources of cash include, among other considerations:
•changes in demand for our products, competitive pricing pressures, supply chain constraints, effective management of our manufacturing capacity, our ability to achieve further reductions in operating expenses, our ability to make progress on the achievement of our business strategy and sustainability goals, the impact of our restructuring programs on our production and cost efficiency, and our ability to make the research and development expenditures required to remain competitive in our business; and
•the debt and equity capital markets could impact our ability to obtain needed financing on acceptable terms or to respond to business opportunities and developments as they arise, including interest rate fluctuations, macroeconomic conditions, sudden reductions in the general availability of lending from banks or the related increase in cost to obtain bank financing and our ability to maintain compliance with covenants under our debt agreements in effect from time to time.
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Debt Guarantees and Related Covenants
As of April 3, 2026, we were in compliance with the indentures relating to our 0% Notes, 0.50% Notes and 3.875% Notes and with covenants included in the Credit Agreement. The 0% Notes, 0.50% Notes and 3.875% Notes are senior to the existing and future subordinated indebtedness of onsemi and its guarantor subsidiaries, rank equally in right of payment to all of our existing and future senior debt and, as unsecured obligations, are subordinated to all of our existing and future secured debt to the extent of the assets securing such debt.
Recent Accounting Pronouncements
For a discussion of recent accounting pronouncements, see Note 3: ''Recent Accounting Pronouncements and Other Developments'' in the notes to the unaudited consolidated financial statements included elsewhere in this Form 10-Q and our 2025 Form 10-K.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in market risk from the information presented in Part II, Item 7A. "Quantitative and Qualitative Disclosures About Market Risk" in the 2025 Form 10-K.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
We also carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the fiscal quarter ended April 3, 2026.
There have been no changes to our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the fiscal quarter ended April 3, 2026 which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II: OTHER INFORMATION
Item 1. Legal Proceedings
See Note 10: ''Commitments and Contingencies'' under the heading "Legal Matters" in the notes to the consolidated unaudited financial statements included elsewhere in this Form 10-Q for additional information on our legal proceedings and related matters. See also Part I, Item 1 "Business - Government Regulation" of the 2025 Form 10-K for information on certain environmental matters.
Item 1A. Risk Factors
Our business, financial condition and results of operations are subject to a number of trends, risks and uncertainties. We review and, where applicable, update our risk factors each quarter. There have been no material changes from the risk factors disclosed in Part I, Item 1A of the 2025 Form 10-K.
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Forward-Looking Statements
This Quarterly Report on Form 10-Q includes "forward-looking statements," as that term is defined in Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements, other than statements of historical facts, included or incorporated in this Form 10-Q could be deemed forward-looking statements, particularly statements about our plans, strategies and prospects under the heading "Management’s Discussion and Analysis of Financial Condition and Results of Operations." 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 Form 10-Q 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.
Important factors that could cause our actual results to differ materially from those anticipated in the forward-looking statements are described under Part I, Item 1A "Risk Factors" in the 2025 Form 10-K, in this Form 10-Q 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 the aforementioned reports and subsequent reports filed with or furnished to the SEC before making any investment decision with respect to our securities. The risk factors described herein and in our 2025 Form 10-K are not all of the risks we may face. Other risks not presently known to us or that we currently believe are immaterial may materially affect our business. If any of the 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.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following table provides information regarding repurchases of our common stock during the quarter ended April 3, 2026:
Period (1) | Total Number of Shares Purchased | Average Price Paid per Share ($) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar value of Shares that May Yet be Purchased Under the Plans or Programs (in millions) ($) | ||||||||||||||||||||||
| January 1, 2026 - January 30, 2026 | 2,507,876 | $ | 61.04 | 2,507,876 | $ | 5,847.0 | ||||||||||||||||||||
| January 31, 2026 - February 27, 2026 | 752,240 | 62.45 | 752,240 | 5,800.0 | ||||||||||||||||||||||
| February 28, 2026 - April 3, 2026 | 2,449,206 | 59.47 | 2,449,206 | 5,654.4 | ||||||||||||||||||||||
| Total | 5,709,322 | $ | 60.55 | 5,709,322 | ||||||||||||||||||||||
(1) These time periods represent our fiscal month start and end dates for the first quarter of 2026.
Shares withheld to satisfy statutory tax withholding requirements related to the vesting of share-based awards are not issued or considered repurchases of our common stock under our New Share Repurchase Program and, therefore, are excluded from the table above.
New Share Repurchase Program
In November 2025, the Board of Directors approved a new Share Repurchase Program (the "New Share Repurchase Program") under which the Company may repurchase up to an aggregate of $6.0 billion of the Company's common stock (exclusive of fees, commissions and other expenses). Under the New Share Repurchase Program, which does not require the Company to purchase any minimum amount of common stock or at all, the Company may repurchase shares from January 1, 2026 through December 31, 2028. The New Share Repurchase Program may be modified, suspended or terminated by the Board of Directors at any time without prior notice.
We repurchased 5.7 million shares of the Company's common stock under the New Share Repurchase Program during the quarter ended April 3, 2026. As of April 3, 2026, the authorized amount remaining under the New Share Repurchase Program was approximately $5.7 billion.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Insider Trading Arrangements
During the quarter ended April 3, 2026, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted terminated
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Item 6. Exhibits
EXHIBIT INDEX
| Exhibit No. | Exhibit Description* | ||||||||||||||||
| 10.1 | Form of Annual Restricted Stock Unit Award Agreement under the ON Semiconductor Corporation Amended and Restated Stock Incentive Plan (2026 form agreement) (1)(3) | ||||||||||||||||
| 10.2 | Form of Annual Performance-Based Restricted Stock Unit Award Agreement under the ON Semiconductor Corporation Amended and Restated Stock Incentive Plan (2026 form agreement) (1)(3) | ||||||||||||||||
| 31.1 | Certification by CEO pursuant to Rule 13(a)-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of Sarbanes-Oxley Act of 2002 (1) | ||||||||||||||||
| 31.2 | Certification by CFO pursuant to Rule 13(a)-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of Sarbanes-Oxley Act of 2002 (1) | ||||||||||||||||
| 32 | Certification by CEO and CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (2) | ||||||||||||||||
| 101.INS | XBRL Instance Document (1) | ||||||||||||||||
| 101.SCH | XBRL Taxonomy Extension Schema Document (1) | ||||||||||||||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document (1) | ||||||||||||||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document (1) | ||||||||||||||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document (1) | ||||||||||||||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document (1) | ||||||||||||||||
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. | ||||||||||||||||
* | Reports filed under the Exchange Act (Form 10-K, Form 10-Q and Form 8-K) are filed under File No. 000-30419 and File No. 001-39317. | ||||
(1) | Filed herewith. | ||||
(2) | Furnished herewith. | ||||
(3) | Management contract or compensatory plan, contract or arrangement. | ||||
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SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| ON SEMICONDUCTOR CORPORATION (Registrant) | |||||||||||
| Date: | May 4, 2026 | By: | /s/ THAD TRENT | ||||||||
| Thad Trent | |||||||||||
Executive Vice President and Chief Financial Officer | |||||||||||
(Principal Financial and Accounting Officer and officer duly authorized to sign this report) | |||||||||||
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FAQ
How did ON (ON Semiconductor) perform financially in the quarter ended April 3, 2026?
ON posted revenue of $1,513.3 million, up from $1,445.7 million. Gross profit nearly doubled to $583.1 million, but the company still recorded a net loss attributable to shareholders of $33.4 million, significantly improved from a $486.1 million loss a year earlier.
What drove ON’s margin improvement in this 10-Q period?
Gross margin rose to 38.5% from 20.3%. The increase mainly reflects the absence of 2025 excess and obsolete inventory and consumables charges, slightly better manufacturing utilization, and favorable mix, especially within Intelligent Sensing, which shifted from a segment gross loss to solid profitability.
How significant are ON’s restructuring and impairment costs in Q1 2026?
ON recorded $329.3 million in restructuring, asset impairments and other charges. These include $20.2 million of severance for a 650‑person workforce reduction, $147.0 million of equipment impairments, and $162.1 million of accelerated depreciation and amortization tied to manufacturing realignment initiatives.
What does ON’s 10-Q say about its liquidity and debt position?
ON held $2,003.6 million of cash and equivalents plus $400.0 million of short-term investments, against gross long-term debt of $3,004.9 million. The company’s $1.5 billion Revolving Credit Facility was undrawn, and management states it expects to remain in covenant compliance.
How much revenue visibility does ON have from long-term supply agreements (LTSAs)?
Remaining performance obligations under LTSAs totaled about $6.5 billion, excluding contracts under one year. ON expects to recognize approximately 35% of this as revenue over the next 12 months, based on current contract prices and demand assumptions.